The figure, reported by Bloomberg citing two sources close to the government, reflects a budget that was drafted after Vladimir Putin and Donald Trump met in Alaska in August, when Moscow expected a peace agreement and a gradual decline in spending. No official data is available: actual military expenditure is classified.

By January, the Kremlin had concluded that an agreement with Ukraine would not be reached, and from the start of the year the government began advancing funds to the defense industry at an accelerated pace, according to the agency.

The annual budget allocated 12.9 trillion rubles for the war. The overspend was covered through domestic borrowing and gold sales. The budget deficit, by the Finance Ministry's new estimate, will reach 7.3 trillion rubles instead of the planned 3.8 trillion.

The 17 trillion figure is nearly equal to the record 17.1 trillion rubles in defense spending set out in the draft budget for 2027. That amounts to 35% of total expenditures, a new maximum since Soviet times, The Moscow Times notes.

Bloomberg economist Ekaterina Vlasova says the government is finally budgeting for a protracted war in Ukraine, but still underestimates its cost. Holding military spending at the same level in nominal terms will be difficult, since the war of attrition continues and the cost of military production is rising.

Janis Kluge of Germany's Institute for International Security Affairs calculated that in the first half of the year alone the budget had nearly fulfilled its official spending plan, spending 10.687 trillion rubles on the war. Vladislav Inozemtsev of the Royal Institute of International Affairs in London confirms that the military line was inflated in the early months, with the overrun reaching about 2.4 trillion rubles by May.

Earlier, sources of journalist Farida Rustamova offered a different explanation for the rise in military spending in the 2027-2029 budget. An official involved in drafting the budget said the trigger was Ukrainian attacks on refineries and depots, which peaked in spring and summer when the three-year budget draft was being prepared.

In 2028-2029, spending is to decline slightly, to 16.6 and 16.3 trillion, but next year may also end in an overrun, Bloomberg's interlocutors allow: Moscow doubts that the Trump administration will be able to secure an agreement on terms acceptable to Russia.