Russia approves hike in military spending

y REN QI in Moscow | China Daily Global | Updated: 2023-11-29 10:01

Russian President Vladimir Putin approved a significant increase in military spending that will see around 30 percent of fiscal expenditure directed toward the armed forces in 2024, as he signed draft plans into law on Monday.

The budget had already been approved by lawmakers in both chambers of parliament, the State Duma and Federation Council, as it foresees spending of 36.6 trillion roubles ($415 billion) next year with an expected deficit of 1.595 trillion roubles.

„With the current price situation maintained, the National Wealth Fund will be replenished and we will stably face a budget deficit within 1 percent of GDP. If the situation changes, we will adjust our projections as well,“ Finance Minister Anton Siluanov said.

According to the budget, spending on defense and security combined is set to reach around 40 percent of all budget expenditure next year, as Moscow diverts more resources to its special military operation, of which defense spending is set to increase by almost 70 percent in 2024 from this year.

Russia has an ambitious 2024 revenue target of 35.1 trillion roubles next year, a 22.3 percent planned increase year-on-year based on assumptions of high oil prices.

After the budget was passed by the State Duma last week, Speaker Vyacheslav Volodin said it was developed specifically to fund the military and mitigate the impact of international sanctions.

In another development, Putin has approved the purchase of Russian assets of US machinery maker Caterpillar by Russia’s PSK-New Solutions, owned by former Sberbank executives, according to a decree published on Monday.

The decree did not disclose the value of Caterpillar’s Russian business. The company, which makes machinery for the construction, mining and oil and gas industries, did not immediately reply to a request for comment.

Caterpillar suspended operations in its manufacturing facilities in Russia last year, joining a number of foreign companies that halted business in the country after the military operation was launched in February last year.

According to the decree, PSK-New Solutions is allowed to buy 100 percent of the charter capital in Caterpillar Tosno and Caterpillar Financial in response to Western sanctions.

Under Russian law, presidential approval is needed for the sale of stakes in Russian finance or energy ventures.

Charge denied

Separately, Finland said on Monday that it may take more measures to stop an unusually large increase in asylum-seekers crossing the border from Russia, in what Finland and its Western allies say is „an orchestrated move“ by Moscow, which has denied the charge.

Russian Foreign Ministry spokeswoman Maria Zakharova reiterated earlier that Moscow is open to dialogue with Helsinki on the border situation.

Nearly 900 asylum-seekers from Asian and African nations entered Finland from Russia in November, an increase from less than one per day previously, the Finnish Border Guard said.