Ukraine’s government may face a Hr.300 billion ($7.2 billion) shortfall in its defense budget for the rest of 2025 as the full-scale war continues, Ekonomichna Pravda (EP) estimated.
Ukraine is forced to revise the 2025 budget spending as Russia’s ongoing full-scale invasion has resulted in funding plans being insufficient to cover growing needs.
The Ministry of Defense estimated a Hr.417 billion budget gap by the end of 2025 ($10.1 billion) which the government revised down to Hr.280 billion ($6.8 billion), a fter internal discussions, EP wrote.
Considering other security agencies – the National Guard, Security Service of Ukraine, and military intelligence – the total additional defense spending needed through to the end of the year reaches around Hr.300 billion ($7.2 billion), EP calculated.
In July, Ukraineʼs Parliament, the Verkhovna Rada, voted for increased defense spending by Hr.412.3 billion ($9.88 billion).
Ukraine spent $20.8 billion – or about 75% of its total state budget of $27.9 billion in the first quarter of 2025 to defend itself against Russia, the Kyiv School of Economics (KSE) Institute’s analytic center estimated.
To cover the estimated year-end defense gap, Ukraine’s Ministry of Finance may increase domestic borrowing. Officials plan to issue more government bonds and manage liquidity to free up cash for military spending.
This strategy would rely on the domestic market to provide short-term financing for urgent defense needs in November and December 2025, EP reported.
At the same time, Ukrainian officials are negotiating easing restrictions on existing international aid with Western partners. One focus is the EU’s ERA Loans program, a $50 billion aid to Ukraine funded by G7 countries and the EU using frozen Russian assets as collateral.
Officials are exploring whether at least part of these funds could be used directly for weapons, ammunition, and other defense expenses, EP wrote.
The EU announced on Wednesday it will provide €6 billion ($7 billion) to support Ukraine’s drone production, funded by the interest from immobilized Russian assets.
The European Commission President Ursula von der Leyen said the funding will go directly into a new drone alliance between Europe and Ukraine.