Russia cuts social spending 7% to fund record military budget

Russia plans to cut social spending by seven percent in 2027, including pensions, war veteran payments, and maternity benefits, according to government documents seen by Reuters on Tuesday. The cuts come as Moscow boosts military spending to a record high. Education and health budgets face cuts of six and 6.8 percent respectively. Military spending for 2027 is planned at 17.1 trillion rubles (about 178 billion euros), a 27 percent increase from the original draft and the highest since the Ukraine war began in 2022. The rising defense costs strain Russia's budget, with the 2026 deficit forecast doubled to 3.2 percent of GDP. Moscow plans tax hikes, including a levy on metal and mining companies, while debt servicing costs are expected to rise 21.6 percent. The draft budget goes to parliament by October 1.