Russian leadership foresees no peaceful future – analyst on Moscow’s war spending

Oleksiy Yizhak, analyst at the National Institute for Strategic Studies and co-founder of the Consortium for Defense Information, shared his opinions with Espreso TV.

In 2024, Russia’s military spending hit about $460 billion in purchasing power parity – up 42% from 2023. In nominal terms, it’s lower – around $150 billion. Defense now takes up over 7% of Russia’s GDP and nearly 40% of the state budget.

In 2025, Russian military spending could hit 7.5% of GDP – roughly $200 billion nominally or about $550 billion in PPP terms.

Yizhak notes that in 2024, combined defense spending by the EU and UK reached about $457 billion – a 12% increase over 2023. In PPP terms, that’s still slightly less than Russia’s military spending. But by market exchange rate, it’s double. And unlike in Russia, European defense budgets don’t weigh as heavily on their economies. “The pace of European spending is slower than Russia’s, but still significant: since 2014, the joint EU defense budget has grown by almost 50%,” he says.

At the 2025 NATO summit, members agreed to raise defense spending to 3.5% of GDP over 10 years, with another 1.5% for infrastructure, cyber defense, and industrial base upgrades. If that target is met, the Alliance’s annual defense spending could grow by over $800 billion by 2035.

Yizhak says Russia’s budget follows a mobilization logic: more than 50% goes to salaries, upkeep, and personnel support. Just 1% is spent on R&D, which blocks tech upgrades. Capital spending is 30–35% and mostly funds mass production of artillery, ammo, drones, and glider bombs – all for a war of attrition.

“Russia’s approach isn’t about industrial synergy or innovation. It’s about gaining numbers on the battlefield by burning through resources, not advancing technology. Long-term, this model drains the industrial base and delivers no economic gain. But in the short term, it’s built powerful interest groups who profit from war, stay loyal to Putin, and may now be fused with his regime,” he explains.

He also points out that the structure of defense spending shows a country’s strategic thinking – both in security and economics. It reveals who’s actively fighting or preparing for war, versus who’s betting on long-term gains through tech and economic strength.

“This logic explains both Russia’s reckless resource burn and the puzzling trend in the West – where the U.S. and Europe choose to fund untested tech at home instead of proven Ukrainian production. For the West, long-term peace depends on tech development. For Russia, it doesn’t. Moscow isn’t planning for peace – it’s burning everything now to cling to power over other countries,” Yizhak concludes.