Russia to cut welfare, education and healthcare funding in 2027 draft budget

By Darya Korsunskaya MOSCOW, Sept 29 (Reuters) — Russia will cut funding for welfare, education and healthcare in next year's state budget, in addition to previously announced tax hikes, to help cover soaring military spending, fiscal documents obtained showed. 5 trillion roubles originally budgeted and the highest figure since the start of the war in Ukraine in 2022. Funding for social policy, which covers items such as state pensions, payments to war veterans and maternity benefits, will shrink by 7% in 2027. 8%, compared with the initial plan.

4% in 2027. Russia's budget situation has gradually deteriorated throughout the 4-1/2 years of war in Ukraine as the country has had to tap its fiscal reserve fund, increase borrowing and raise taxes to keep up with growing military spending. Russia is drawing up a three-year budget in an attempt to improve long-term planning, but it has had to revise figures sharply upwards each year and has repeatedly missed its annual deficit targets. The federal budget does not incorporate regional and municipal budgets, which account for a significant share of social spending.

The new tax hikes in the 2027 draft budget, as well as a larger-than-expected increase in utility tariffs planned for next year and announced after this month's parliamentary election, have angered even some Kremlin supporters. The new State Duma, in which the pro-Kremlin United Russia party will hold a constitutional majority, is expected to approve the new budget, with authorities saying that winning the war in Ukraine takes priority over other needs.

While overall non-military spending is shrinking, the share of debt-servicing costs in the Russian budget is rising due to high interest rates, which the central bank maintains to fight inflation, and increased borrowing plans. 6% in 2029. com;)