Key facts
- Ukraine's total war costs are projected to reach $155 billion this year.
- A $27 billion funding gap exists for Ukraine's military spending.
- The government aims to cover $7 billion of the gap by cutting costs and reallocating funds.
- Ukraine is seeking $20 billion in external funding to close the gap.
- This funding is critical for maintaining combat operations into early 2027.
- $29.5 billion in foreign aid is at risk if reform commitments are not met by October 15.
Ukraine's war costs are projected to reach $155 billion this year, with the government struggling to close a $27 billion funding gap that is critical for maintaining combat operations into early 2027, Prime Minister Sergii Koretskyi said on Wednesday.
This is the first time Kyiv has released an estimate of its annual war costs. The figure covers both domestic state spending and off-budget military aid from Western allies, including hardware like missiles and aircraft. Koretskyi stated that plugging the gap is essential for defense orders and for Ukraine's ability to conduct active combat operations, including taking the war back to Russia.
The conflict has become a battle of financial endurance, with Ukraine's total budget revenues of about $70 billion this year fully allocated to defense. The country relies heavily on Western military and financial support. Meanwhile, Russia plans to increase its defense spending to 17.1 trillion roubles ($202.58 billion) in 2027.
Kyiv has faced challenges in receiving foreign aid on time in 2026 due to delays in reforms, corruption scandals, and legislative disputes. Koretskyi warned that $29.5 billion in foreign aid is at risk if Ukraine fails to meet its reform commitments with the IMF and the EU by October 15, emphasizing the urgency of fulfilling these obligations.