🇷🇺🇺🇸 Russia's military budget buys close to 90% of America's in artillery shells - IntelliNews Lambda

Russia's military budget is a fifth of America's in dollars, but counted in artillery shells rather than dollars, it buys close to 90% as much.

And the Kremlin is spending big - and more than it can afford. Nominally, Russia's military spending this year is on course to approach RUB17 trillion ($211bn), which is as much as RUB5 trillion ($62bn) more than it initially planned to spend at the start of this year.

While official figures are opaque, the government's budget plan had pencilled in RUB12.1 trillion ($150bn) for "national defence" in 2026, while SIPRI estimated total actual planned military expenditure at RUB14.9 trillion ($185bn), or 6.3% of GDP, in March. Next year's 2027 budget will lift defence spending again to RUB17.1 trillion ($212bn), or a whopping 41% of all spending.

It's a lot of money, but it is still only a fifth of what the $961.6bn the Pentagon requested for FY2026. And if President Donald Trump gets his way, that will rise to $1.5 trillion next year.

However, spend a dollar in Russia and it goes a lot further than one spent in the US as wages and input costs are a lot lower. Consequently, economists prefer to compare PPP (purchase power parity) adjusted spending that takes this difference in price into account.

At the Bank of Russia's official rate of RUB80.56 to the dollar, RUB17 trillion ($211bn) adjusted for PPP Russia's defence spending is worth about $574bn - not 22% of US spending but close to 60% of the US figure - still a big gap, but may be enough to keep Russia in the game if it went to war with the US.

The International Institute for Strategic Studies made the same kind of adjustment in its Military Balance 2025, valuing Russia's 2024 defence spending of RUB13.1 trillion ($163bn) at $462bn in PPP terms - more than the EU and the UK combined that would be in the frontline if war in Europe really does break out.

The story doesn’t stop there as even the PPP adjustment flatters the US. The PPP adjustment is an aggregate adjustment to the value of the currency that takes everything into account, but military production is very specific. The difference between what a dollar spent in the market can buy you in the market is not the same as what it pays for in Russia’s drone factory in the Alabuga Special Economic Zone in Tatarstan or the artillery shell plants in the depths of Siberia.

On the flip side, the US defence sector is bloated, and its products are, in comparative terms, badly overpriced. Instead of comparing dollar-for-adjusted dollars, it makes more sense to compare the cost of production of like-with-like. A dollar of Pentagon money buys fewer shells, tanks and jets than a dollar's worth of rubles does in Russia. Counting the military spending in terms of "artillery shell production units" then Russia's spending on the weapons it actually uses in its war in Ukraine is just under 90% of US spending.

Artillery shell units are the basic comparison as everything that goes into making the Soviet-era standard 152mm shell is Russian: the metal, the gunpowder, the power, the labour. One shell costs an estimated $1000 to make, according to defence publication Militarnyi, whereas the Nato equivalent 155mm shell costs $4000 to make in the US, according to consultancy Bain & Company. The PPP adjustment implies the Russian shell should be about 2.7-times cheaper, but the actual difference is Russian shells are four-times cheaper to make than American shells.

If the war were entirely about shelling the enemy then Russia and the US spending is almost on a par.

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