The price of resistance: Ukraine’s defense spending has increased 10 times in 4 years
29 July 2025 15:47
INFOGRAPHICS
Since the beginning of the full-scale war, defense and security spending has become a key item in Ukraine’s state budget. In the first half of 2025, they reached a record share of 59% of the general fund of the consolidated budget, "Komersant Ukrainian" reports, citing Top Lead infographics.
These figures are almost three times higher than in the first half of 2021, when only 17.2% were allocated for these needs. The dynamics illustrate a radical reorientation of budget policy in the context of a protracted war.
Defense and security spending has increased not only in relative terms but also in absolute terms. While in the first half of 2021 the state spent UAH 0.12 trillion, in the first half of 2025 it spent UAH 1.20 trillion. This is an almost tenfold increase in just four years, which clearly reflects the scale and duration of the military burden on the economy.
Escalation at the front and budget reorientation: chronology of expenditures
A gradual shift in priorities began even before the full-scale invasion. In the second half of 2021, the share of the defense budget had already increased to 18.8%, which corresponded to UAH 0.16 trillion. However, the real budget breakdown occurred in 2022. In the first half of the year, defense spending accounted for 42.8% of the general budget fund, and amounted to UAH 0.46 trillion.
Since the second half of 2022, there has been a steady increase in the share of defense funding. Currently, it is more than 50% of the total budget. In the second half of 2022, it reached 57.2% (UAH 0.92 trillion), in the first half of 2023 it was 54.9% (UAH 0.84 trillion), and in the second half of 2023 it was 57.9% (UAH 1.04 trillion).
In 2024, this trend continued: 55. 5% of the budget was spent on security in the first half of the year (UAH 0.93 trillion), and 58.1% in the second half (UAH 1.24 trillion). Now, in the first half of 2025, we have another peak – 59% of the general budget fund (UAH 1.20 trillion).
What does 59% of defense spending mean for Ukraine?
The burden on the budget, where more than half of the funds are spent on security, has complex consequences for the economy as a whole. On the one hand, it allows the country to maintain stability at the front, meet the needs of the army, and support the military-industrial complex. On the other hand, resources for civilian infrastructure development, education, healthcare, innovation, and economic growth are being reduced.
In wartime conditions and given the high risks, tax revenues remain unstable, and a significant portion of the budget is covered by foreign aid. Nevertheless, preserving national sovereignty and defense capabilities remains an absolute priority.
Read also: Tax support of the economy: which business fills the budget of Ukraine in wartime
Challenges for the state budget in the future: what are we talking about?
The current level of defense funding can hardly be considered sustainable in the long run. More than half of the budget allocated to the war is an extreme figure that can only be justified by the conditions of a prolonged military conflict. After the active phase of hostilities is over, the state will have to return to a balance between security and development.
The question is not only how to reduce spending on war, but also how to reorient the economy, make it diversified, and strengthen institutional capacity and investment attractiveness. Defense spending should be transformed into long-term investments in the security sector, modernization of the army and development of the defense industry.
Meanwhile, the Ukrainian investment company Concorde Capital has estimated that Ukraine still needs $90 billion a year in foreign aid to finance all areas necessary for the state to function as a single mechanism.
This is not only about budgetary needs, but also about defense funding, explained Concorde Capital analyst Oleksandr Parashchiy at a discussion held by the Center for Economic Strategy.
In 2024, spending on security and defense amounted to about $95 billion, in 2025 it could reach $100-105 billion, and in 2026 – up to $120 billion. This is in addition to another $42 billion for other budget expenditures. At the same time, the expected revenues are only $55 billion, so the gap is more than $85-90 billion annually,” Parashchiy explained.
“In 2025, part of this amount will be covered by funds from the frozen assets of the Russian Federation (ERA), the EU’s Ukraine Facility program, and the remaining US aid. However, the 2026 budget is still without clear sources of financial support.
It should be noted that President Zelenskyy also stated that Ukraine needs $65 billion in aid annually, of which $25 billion is for domestic defense production.
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