Russia's Defense Manufacturing Growth Faces Constraints Amid Broader Industrial Decline

Russia's defense budget for 2026 is set at 12.1 trillion rubles, with expectations of further increases due to rising government expenditures. Output in defense-related industries nearly doubled from 2023 to 2025, yet growth is slowing, with a mere 0.4% rise in overall industrial production during the first five months of 2026.

Specific sectors showed mixed results: 'other transport equipment' grew by 23.3% while electronic products only increased by 2.1%. Analysts from Chatham House highlight a deterioration in the defense sector's technological capabilities, suggesting that reliance on Soviet-era technologies and foreign suppliers may impede future advancements. As sanctions-related growth momentum wanes, many civilian sectors are stagnating or declining.