MOSCOW—Russian defense procurement will drop by about 10% this year as low oil and gas prices drain income from the state budget, according to the powerful head of the conglomerate that controls the key pieces of Russia’s military-industrial complex.

Sergei Chemezov, chief executive of the Russian state industrial holding Rostec—the maker of weapons including Kalashnikov assault rifles and Pantsir antiaircraft systems—said he expected the Russian defense sector to contend with a decrease in government orders.

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