Page 60 - RusRPTJun19

In 2018, government defence spending declined slightly in nominal terms. In real terms, expenditure has fallen sharply, but is still large, as in previous years. The Ministry of Finance, the Stockholm International Peace Research Institute (SIPRI), and the Gaidar Institute (IEP) calculations at the National Academy of Economics and Government (RANHiGS) provide a similar picture of developments in defence spending. Last year, expenditure was in real terms at an elevated level in 2014, if assessed on the basis of domestic producer prices and wage increases. The expenditure-to-GDP ratio was almost the same as in 2013 (2.7% for Finance, 3.7% for SIPRI and just over 4% for IEP). Their share of total government expenditure remained high (over 8% in the Ministry and 11-12% in SIPRI and IEP, a little more than in education or health). The figures published by SIPRI and IEP include not only the defence expenditure of the Ministry of Finance, but also significant items from other budget expenditure categories. The largest additional items are pensions for the armed forces, national security for internal security and expenditure on border control and secret budget expenditures on the economy. In the past couple of years, the share of these additional items in total figures has been 27% for SIPRI and 33% for IEP. In addition, IEP publishes RANHiGS data and estimates for defence industry bank loans, according to, which, over the past few years, loan repayments have exceeded credit (the difference has been 0.2-0.3% of GDP). According to SIPR, real defence spending has risen rapidly in the Russian neighborhood. Compared to 2013, expenditure in Central Eastern Europe and the Baltic countries has increased by an average of 45%, in Ukraine by 53%, in Turkey by 60% and in China by 36%. In 2018, nominal defence spending was $61bn in Russia, $250bn in China, $266bn in Western Europe and $649bn in the US.
60 RUSSIA Country Report June 2019 www.intellinews.com