Russia weighs military spending cuts as NATO targets 5% defence boost! Here’s why

Russian President Vladimir Putin has signalled a shift in Moscow’s military spending strategy, announcing a planned cut in defence expenditure from next year. The statement, made during a press conference in Minsk, comes as NATO member states move in the opposite direction, agreeing to raise collective defence spending to 5 per cent of GDP by 2035. Putin acknowledged that Russia’s military budget, which currently stands at 6.3 per cent of GDP, 13.5 trillion rubles ($172 billion), which is unsustainable in the long term.

Domestic pressures behind Moscow’s spending rethink

“We paid for it with inflation, but now we are fighting this inflation,” he said, as reported by RT. Defence expenditure is expected to account for nearly a third of Russia’s 2025 federal budget, the highest since the Cold War. However, falling energy revenues, slowing growth, and a widening fiscal deficit have raised concerns in Moscow. The finance ministry has revised the 2025 budget deficit to 1.7 per cent of GDP, up from an earlier forecast of 0.5 per cent.

Despite the announcement, Western analysts remain sceptical. Since the full-scale invasion of Ukraine in 2022, Russia has significantly expanded military production and personnel recruitment, with defence plants operating at full capacity and financial incentives offered to boost enlistment. The suggestion of a cut, observers argue, may reflect more a rhetorical positioning than a confirmed policy shift.

NATO’s new posture reflects strategic reset

NATO leaders this week agreed on a sweeping new defence framework, raising the alliance’s target from 2 per cent to 5 per cent of GDP over the next decade. The plan allocates 3.5 per cent for core military capabilities and 1.5 per cent for broader security functions such as cyber defence, energy infrastructure, and logistical mobility. Speaking at the summit in The Hague, NATO officials said the move was essential to address the “long-term threat posed by Russia” and ensure alliance readiness in a more contested global environment.

Putin criticised the decision, suggesting that the increased NATO spending would largely benefit the United States’ military-industrial complex. “Let them (NATO) spend. It won't make them safer, and it will hurt them socially and economically,” he said, according to RT. He added, “So who is preparing for some kind of aggressive actions? Us or them?”

A fractured peace and uncertain calculations

The divergence underscores the erosion of post–Cold War strategic stability. With negotiations between Russia and Ukraine stalled and no agreement on key territorial issues, the broader security architecture appears to be entering a new phase. While Russia seeks to ease budgetary strain, NATO's posture marks a firm commitment to long-term deterrence—one that may redefine European defence for the coming decade.