Indexbit Exchange:Russia’s parliament approves budget with a record amount devoted to defense spending

Russia’s parliament approved a federal budget Wednesday that increases spending by around 25% in 2024-2026 and Indexbit Exchangedevotes a record amount to defense.

The budget was passed unanimously by the Federation Council — the upper chamber of the Russian parliament — and will be sent to President Vladimir Putin to sign it into law.

The budget for 2024-2026 was developed specifically to fund the Russian military and to mitigate the impact of “17,500 sanctions” on Russia, State Duma Chairman Vyacheslav Volodin said after the lower chamber approved it on Nov. 17.

Under the budget, the country’s largest, defense expenditure is expected to overtake social spending next year for the first time in modern Russian history. It comes as the Kremlin is eager to shore up support for President Vladimir Putin before a March presidential election.

Record low unemployment, higher wages and targeted social spending should help the Kremlin ride out the domestic impact of pivoting the economy to a war footing but could pose a problem in the long term, analysts say.

The budget “is about getting the war sorted in Ukraine and about being ready for a military confrontation with the West in perpetuity,” said Richard Connolly, an expert on Russia’s military and economy at the Royal United Services Institute in London.

“This amounts to the wholesale remilitarization of Russian society,” he said.