Ukraine needs $56 billion to cover its budget deficit this year, Reuters reported. The amount is equivalent to about a quarter of the country's economic output, with approximately $27 billion of it related to military spending.
The government has already frozen non-essential payments, including funds to repair damaged buildings and infrastructure. The priority is military spending, public sector wages and pensions.
“All resources must be directed to critical areas“, Prime Minister Serhiy Koretsky said.Kiev is discussing with European partners the possibility of accelerating payments on the agreed 90 billion euros loan. The European Commission and Ukrainian authorities have said they have found funds to cover the shortfall by the end of the year. But three sources familiar with the talks warned Reuters that releasing the funds earlier could increase budget pressures in 2027.
War spending rises
In the first nine months of 2026, Ukraine spent more than $44 billion on defense, while tax revenues were about $42 billion. According to Roksolana Pidlasa, chairwoman of the Verkhovna Rada’s budget committee, the daily cost of military operations has risen from about $140 million two years ago to $190 million now.
“Spending will continue to rise,“ Pidlasa said. According to her, the increase is related to the need for more expensive medium- and long-range weapons, higher costs for maintaining the army and support for the families of dead or disabled servicemen.
Russian strikes have led to the loss of more than 49.5 billion hryvnias in tax revenues in the first nine months of the year due to damaged facilities, disrupted logistics and forced closures of shops and businesses. The government expects losses to reach 70 billion hryvnias by the end of the year.
A blow to industry and exports
Kryvyi Rih, the hometown of President Volodymyr Zelensky, is among the hardest-hit industrial centers. The city's largest employer - the ArcelorMittal steel mining and production complex - has stopped working after a series of Russian missile strikes.
Ukraine's grain exports fell 36.6% year-on-year in September due to attacks on Black Sea ports. Economy Minister Oleksandr Kravchenko estimates the export revenue at risk at around $40 billion.
Economists say Ukraine's economy will grow by between 0.5% and 1.5% in 2026, down from 1.8% in 2025. The government has postponed about $900 million in capital spending until December while parliament debates legislation that will determine the release of some foreign aid. Prime Minister Koretsky said that the necessary laws must be adopted by October 15.
Finance Minister Sergei Marchenko has indicated that the unfunded budget deficit for 2027 already exceeds $32 billion. Among the solutions being discussed is the use of frozen Russian assets in Europe, which amount to about €210 billion.
Sources: rbc.ru, investing.com