Both Russia and Ukraine have laid out their war budgets for 2027—two fiscal plans, two distinct limits. Putin continues to drain the state treasury and citizens’ pockets; Ukraine allocates its funds not to weapons, but to people.

First, Russia: defense spending projected at 1.71 trillion rubles ($17.8 billion) in 2027—a 27% increase over the initial target and the highest level since the war began. Combined defense and national security expenditures account for 43.9% of the total budget.

Where does the money come from? Tax hikes, bond issuance, and depletion of reserves—three measures pursued simultaneously. Mineral sector windfall taxes, progressive income taxes on individuals, and value-added taxes on cross-border e-commerce platforms have all been implemented where possible. Net borrowing has been raised further, pushing government debt above the self-imposed 20% GDP safety threshold. The State Wealth Fund has already exhausted 11% of its liquid assets this year.

The domestic consequences are clear. Social welfare spending is cut by 7%, education by 6%, and healthcare by 6.8%, with social benefits reduced to their lowest share in two decades. Even more concerning, these figures likely understate actual military expenditure. Military spending through the first nine months of 2025 was already four times that of 2021; budget secrecy now stands at 28.6%, the highest in post-Soviet history. Over four years of “special military operation,” cumulative defense costs have reached $522 billion—enough to sustain the entire national higher education system for 24 years.

Now consider Ukraine. Security and defense spending totals 4.885 trillion hryvnias ($10.37 billion), accounting for 67.2% of total expenditures and roughly 44% of GDP. On the surface, this appears as a full-scale mobilization—but closer inspection reveals a tightening constraint. The bulk of new defense spending goes to personnel, not equipment.

Sixty-five percent of additional defense funding flows into salaries and allowances; weapons procurement increases by less than 0.3%, while real purchasing power continues to erode. The Ministry of Defense estimates a true requirement of $175 billion, yet the budget covers only $100 billion—leaving a persistent gap of $50 to $75 billion annually.

More critically, 2.493 trillion hryvnias of the 2027 budget revenue relies on external aid. Total external financing needs amount to $5.26 billion for the year, with only $2 billion secured so far—$3.26 billion remains unaccounted for. A pivotal decision hinges on the October European Council meeting: whether frozen Russian assets can be used as collateral for loans.

When viewed side by side, the structural asymmetry becomes evident. Russia’s constraints are internal: funding comes from domestic taxpayers, and the cost manifests as inflation, rising interest rates, and labor shortages. Ukraine’s constraints are external: nearly 44% of its war financing depends on foreign contributions—without which its budget collapses. A funding pause means immediate exposure.

Transparency offers a stark contrast. Ukraine publishes its defense budget in five detailed categories down to the billion-hryvnia level; Russia conceals 28.6% of its budget behind closed doors, no longer disclosing actual military expenditures at all. Who has more need to hide the true cost from its own population is unmistakable.

Both budgets assume a full-year war. Ukraine includes contingency scenarios requiring an additional 400–500 billion hryvnias in defense spending; Russia has already bundled a three-year, 5-trillion-ruble military plan. A three-year commitment to war fundamentally contradicts any claim that hostilities will end by 2027.

As the war enters its fifth year, each day’s artillery barrage echoes the relentless page-turning of these two fiscal statements. Russia faces a constraint rooted in domestic resources, with time tethered to inflation and reserve levels. Ukraine’s survival depends on foreign inflows, with time tied to votes at the October European Council.

Original source: toutiao.com/article/1878085844526151/

Disclaimer: This article reflects the personal views of the author.