Fri, 01 Jul 2022

MOSCOW, Russia: According to preliminary data released by the finance ministry this week, almost three months after Moscow's invasion of Ukraine, Russia's defense spending was up nearly 40 percent for the first four months of 2022.

Between January and April, Russia spent $26.4 billion on defense, almost half the 3.5 trillion roubles, or 2.6 percent of GDP, budgeted for all of 2022.

Initially forecasting a budget surplus of 1 percent of GDP, or 1.3 trillion roubles, for 2022, the ministry now expects a deficit of at least 1.6 trillion roubles, allowing for support payouts to counter the effects of Western economic sanctions.

Russia's National Wealth Fund (NWF), a backup fund built up from oil and gas revenues, will be used to cover the deficit and support the value of stocks and bonds, which have fallen sharply since Moscow began its invasion of Ukraine on 24th February.

According to data released this week, some of the NWF is invested in financial markets, but between early February and April, its value fell $20 billion to $155 billion.

In April alone, Russia spent $9.7 billion on its military, up 128 percent on April 2021, helping to tip the monthly state budget into a deficit for the first time this year.

The finance ministry has so far declined to comment on its defense spending.

More than 14 million Ukrainians have fled their homes and thousands have been killed as a result of conflict that Russia said was necessary to counter Western aggression and protect Russian-speakers in the neighboring country.

Ukraine has said that it is fighting an imperialist invasion and denied Moscow's claims of aggressive nationalism and persecution of Russian-speakers.

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