Russia’s defense outlays are far larger than official figures suggest, with BND estimates placing actual military spending at about €250 billion in 2025—roughly 10% of GDP and about double what Moscow officially reports.

The extra funds extend beyond Ukraine-related warfare, fueling broader military modernization and expansion, particularly along NATO’s eastern flank, with hidden cash often routed through ministries and non-defense line items.

Since the start of the Ukraine war, Russia’s defense spending has risen every year, but much of it is counted outside the defense budget and may be buried in areas such as construction, military IT projects, and social benefits for service members due to shifting definitions and possible reporting distortions.

The report comes as new Russia-Ukraine talks in Abu Dhabi, brokered by the United States, pursue settlements Moscow insists Kyiv must accept for an end to the conflict, while Moscow signals the operation will continue until Kyiv concedes.

The UK suggests the Kremlin aims to institutionalize the war by advancing candidates for the State Duma, signaling deepening political mobilization around the conflict.

BND President warned that Moscow may mask its true aims and test European borders, arguing Europe should brace for further escalation as Russia seeks to undermine NATO, destabilize democracies, and intimidate societies.

Earlier warnings from BND in October echoed concerns about camouflage of strategic aims and Europe-facing escalation, underscoring a pattern of Russian pressure on the continent.

BND’s briefings and public testimony frame Russia’s actions as an attempt to destabilize the region and justify heightened European defense postures amid rising tensions.

The ongoing conflict’s toll is highlighted by extensive casualties, displacement, and destruction across Ukraine, setting a grim backdrop to the negotiating efforts.

The BND signals Moscow may be prepared for direct military clashes with NATO, potentially before 2029, implying an elevated risk of wider conflict.

Western observers warn of a possible Russian attack on a NATO member within the next few years, prompting a substantial European and German defense buildup.

The scale of concealed military spending could equal about 10% of Russia’s GDP, intensifying concerns over fiscal transparency and strategic risk.