Over the next four years, Ukraine may require external financial support amounting to nearly $389 billion. This figure accounts for necessary expenses for defense, budget support, infrastructure restoration, and arms supplies, as calculated by international experts.
This is reported by Business • Media
Increasing Funding Needs and Changing Role of Partners
As the administration of U.S. President Donald Trump has completely suspended funding for Ukraine, the primary burden of financial assistance falls on European countries. Consequently, the burden on the budgets of European Union states is expected to rise from approximately 0.2% of GDP to 0.4% of GDP.
Currently, Ukraine has a direct defense budget of about $65 billion per year, while an additional $73 billion is spent on other state expenditures annually. The revenue side of the budget is around $90 billion per year, leaving a deficit of approximately $50 billion each year. Separately, Ukraine receives military assistance from partners, which is estimated at $40 billion for the current year.
Restoration Needs and Possible Funding Sources
Defense spending is expected to increase by 5% annually, and restoring the destroyed infrastructure will cost an additional $5 billion each year. Thus, taking all needs into account, Ukraine will require $389 billion over the next four years, with funding needed even if the war ends.
“The EU has planned to allocate $15 billion by 2027. Non-European partners, aside from the U.S., are likely to provide Ukraine with $2 billion per year, while the IMF will contribute about $10 billion. Therefore, the only viable option to cover all of Ukraine’s needs is a reparations loan provided from funds frozen in European accounts of the Russian Federation.”
Economists are confident that in light of the suspension of American aid, reparations from frozen accounts of the Russian Federation in Europe remain the only real alternative to cover Ukraine’s financial deficit in the coming years.