Ukraine’s 2026 war costs hit $155 billion, faces $27 billion funding gap

The figure provides a rare view of the financial scale of Russia’s war against Ukraine. It includes Ukraine’s own spending as well as military assistance supplied directly by international partners, according to Prime Minister Sergii Koretskyi.

Koretskyi said Kyiv was working to close the $27 billion shortfall, reported Reuters. The government plans to find about $7 billion through tighter public finances, spending optimization and reallocating funds within the budget, while seeking international support for the remaining $20 billion.

The Ukrainian government confirmed the additional defence funding requirement in a September 25 statement, saying some of the money is needed immediately to prepay deliveries expected in the first quarter of 2027.

The funding challenge comes as Ukraine prepares for another year of war while continuing to rely heavily on European and other international partners for financial and military support. Importantly, the $155 billion figure is not the amount of cash Ukraine needs to raise from its own budget.

Koretskyi has said the estimate includes military assistance provided by international partners in the form of weapons, equipment and other military assets. The figure therefore represents the broader resources required to sustain Ukraine’s war effort rather than a conventional annual defence budget.

The $27 billion shortfall is the portion of that broader requirement for which Ukraine has not yet identified sufficient financing.

Why does Ukraine need so much money?

The scale of Ukraine’s financial requirements reflects the intensity and length of the war. Russia and Ukraine continue to use large numbers of drones and missiles, while fighting continues along a front line stretching about 1,200 kilometres, reported Reuters.

Ukraine needs to replenish ammunition, replace equipment and expand domestic production while maintaining air defence and long-range strike capabilities.

Drones have become particularly important. President Volodymyr Zelenskiy said on September 25 that Ukraine needed to place orders for drones in October and November to avoid supply problems at the beginning of 2027. Reuters also reported that he called for greater investment in Ukrainian-made drones and missiles.

“Everyone understands that Ukraine cannot be alone, and that more investment is needed in Ukrainian-made drones and missiles,” Zelenskiy said, according to Reuters.

The pressure extends beyond military equipment. Ukraine must also pay soldiers, support military families and maintain pensions, salaries, healthcare, education and other essential government services.

That has created a difficult wartime budget trade-off: defence remains the government’s main priority, but civilian spending cannot simply disappear.

Koretskyi said some of the additional defence funding would come from reallocating money within existing government programmes. “Some of these funds are needed right now to prepay deliveries expected in Q1 2027,” he said in the government statement.

Military procurement often involves contracts and advance payments. A delay in securing funds at the end of 2026 could therefore affect equipment deliveries several months later.

Ukraine is consequently trying to secure financing before the new year rather than waiting until the equipment is needed. The funding challenge is also unfolding as the Ukrainian economy remains under pressure from the prolonged war.

Russian attacks have damaged businesses, factories, energy infrastructure and transport networks. Such damage can reduce economic activity and tax revenues while simultaneously increasing government spending.

Ukrainian retailer Fozzy Group said Russian attacks had damaged more than 20 of its facilities between August 1 and September 25, reported Reuters. The company said it had lost infrastructure and inventory and faced higher costs.

What is $27 billion funding gap?

The $27 billion figure is an unfunded portion of the broader $155 billion requirement, rather than a separate bill on top of it. Koretskyi has said Ukraine established the $155 billion estimate earlier this year after assessing its overall wartime requirements.

According to RBC-Ukraine, he said the figure was presented at a Ukraine Defense Contact Group meeting in February and included both budgetary and non-budgetary requirements, including equipment supplied directly by international partners.

Foreign assistance does not always arrive as cash. An ally can provide missiles, aircraft, launchers, ammunition or other military equipment directly. Ukraine receives the military capability, while the value of that assistance forms part of the resources required to sustain its war effort.

The $27 billion gap, however, concerns defence requirements that still need a financing source. Koretskyi said Kyiv aims to cover approximately $7 billion domestically through spending optimization, reallocating funds and other budget measures. The remaining $20 billion is expected to come from international partners.

Ukraine is holding discussions with the European Union, NATO countries and other partners as it seeks to close the shortfall. The government is also working with parliament on legislative and policy measures needed to unlock additional external financing. “Step by step,” Koretskyi said while describing the government’s work with parliament to unblock financing.

The pressure is already affecting domestic spending priorities. Ukraine has prioritised defence, pensions, social payments and public-sector salaries while delaying or reallocating some less urgent expenditure.

Delaying infrastructure projects can affect local governments, construction companies and workers. Reducing other government programmes can put additional pressure on communities that depend on state funding.

Kyiv therefore faces two simultaneous challenges – financing the war while keeping the civilian economy and essential public services functioning.

How will Ukraine find the remaining $20 billion?

International partners are central to Kyiv’s financing strategy. Ukraine has relied heavily on financial and military assistance from Europe, the US and other allies since Russia’s full-scale invasion in 2022. That support has helped the government continue operating while domestic resources are directed heavily towards defence.

The latest request adds to that dependence. Koretskyi said Ukraine was in direct talks with NATO countries and other partners about closing the funding gap. “There are direct talks at the defense-agency level with NATO countries and other partners to help close this gap,” he said, according to the Ukrainian government’s statement.

The European Union is particularly important. Kyiv had asked the EU to accelerate part of a planned loan so Ukraine could access the money sooner amid immediate defence needs, reported Reuters.

Ukraine also expects substantial international financing for non-defence expenditure. Reuters reported that Kyiv expects to need more than $52 billion in international financial aid in 2027 for social and humanitarian spending, in addition to its defence requirements.

Even if Ukraine closes the immediate $27 billion defence gap, it will still need substantial external financing in 2027. The International Monetary Fund is also involved in discussions over Ukraine’s finances. 

Finance Minister Sergii Marchenko expected an IMF mission for the second review of Ukraine’s financing programme in November, reported Reuters.

Kyiv wants to have a clearer financing plan for the 2027 budget ahead of that review. The government is therefore dealing with two interconnected financing problems.

The first is the immediate $27 billion defence shortfall. The second is the broader financing requirement for 2027.

Both are linked because money needed to place defence orders in late 2026 can determine whether equipment reaches Ukraine in early 2027.