Putin earmarks 32% of Budget 2025 for Russia’s defence. Is he preparing for 4th year of Ukraine war?

As the war on Ukraine has entered a decisive phase, Russian President Vladimir Putin has approved the highest-ever defence budget for the next three years.

Russia’s defence budget for 2025-27 is about $126 billion (13.5 trillion rubles) with a year-on-year hike of around 22 per cent, according to CNN.

At 32.5 per cent of the total budget, this is the largest-ever defence budget in Russia’s history. In 2024-25, the CNN reported that the share of the defence sector in the overall budget was 28.3 per cent.

The record budget with a 22 per cent year-on-year hike comes at a time when Russia is looking forward to maximise its gains in Ukraine. Throughout the year, Russia has scored victories across the various theatres , winning key cities of Avdiivka, Vuhledar, and Ukrainsk. Russia has also got dangerously close to Povrovsk, which would be the most important victory in this leg of the war if it is captured.

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The record budget is a sign that Putin is looking at making a decisive push inside Ukraine in the coming year. The idea appears to be to make maximum territorial gains to enter negotiations —whenever talks start— with a position of strength.

Russia is also understood to have recaptured as much as 40 per cent of territory that Ukraine had captured in Russia's Kursk province in a counter-offensive earlier this year. The Kursk incursion appears to have backfired for Ukraine as while Ukraine devoted a large chunk of some of its best units and equipment to the region with the idea that Russia would need to divert its resources from other theatres, that has not been the case. On the contrary, Russia has continued to make gains in every theatre and has even eroded Ukraine’s gains in Kursk.

Putin’s push also comes at a time when Donald Trump is set to assume US presidency next month. As he is expected to cut support to Ukraine and has longstanding dovish take on Russia in a sharp break from outgoing President Joe Biden’s hawkish stance, Putin appears to be certain that tides are turning in his favour and he is set to win the war on Ukraine that be began in 2022.

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While Ukraine appears set to lose the biggest ally, the United States, Russia firmly has its allies China, North Korea, and Iran behind it. North Korea is understood to have supplied up to 10,000 soldiers in addition to missiles and ammunition to Russia while Iran is also understood to have supplied weapons, including drones. China has supplied drones, dual-use technology, spare parts, and critical machinery to Russia, becoming the lifeline to the Russian economy .

Since the beginning of the Russian war on Ukraine, Russia’s economy has become war-centric with the military-industrial complex taking centre-stage in the national economy. Instead of consumer goods or services, the national focus has shifted towards producing for the war.

The record budget is one of the many steps that suggest that Putin is no mood to dial down the war in Ukraine. In September, he ordered to increase the military’s numbers by around 180,000 to a total of 1.5 million. He has also ordered a fresh round of conscription.

Last month, Putin also launched an experimental intermediate ballistic missile on Ukraine and changed Russia’s nuclear weapons doctrine, which significantly lowered the threshold for the usage of nuclear weapons. The new doctrine allows for the usage of nuclear weapons even in response to conventional attacks.