Shmyhal says budget surge mirrors last year’s defense funding crisis
Photo: press service of the Cabinet of Ministers

Expenditures from the general fund of Ukraine’s state budget increased by 25% year-on-year to UAH 1.2 trillion in the first four months of the year, the Ministry of Finance reported on Friday. According to Prime Minister Denys Shmyhal, Ukraine was forced to ramp up spending due to a reduction in foreign military assistance.

"Unfortunately, the situation has repeated itself," Shmyhal told lawmakers during a government Q&A session in parliament on May 16.

He noted that in the first quarter of 2024, there were significant delays in the delivery of weapons from the United States, prompting the government to urgently reallocate funds to procure weapons and ammunition. This created a budget shortfall, which by the end of May 2024 was estimated at $5 billion.

"Since the first quarter of 2025, we have again faced a decline in support from some partners, which forced us to cover additional defense procurement—particularly for ammunition for our Armed Forces. Naturally, this has led to increased expenditures," the Prime Minister said.

Shmyhal says budget surge mirrors last year’s defense funding crisis
Source: Ministry of Finance of Ukraine

Despite the added fiscal pressure, Ukraine's budget execution remains on track, with tax and customs revenues exceeding targets, largely due to the responsible tax compliance of businesses.

However, Shmyhal warned that in wartime, financial needs are volatile and depend heavily on both battlefield developments and international support. If necessary, he said, the government would seek additional appropriations from parliament.

  • The Ministry of Finance emphasized that the 2025 state budget is designed to maintain macroeconomic stability even if active hostilities continue throughout the year. More than UAH 2.2 trillion—equivalent to 26.3% of GDP—has been earmarked for defense and security expenditures.
  • Still, as of early April, concerns emerged that current spending levels might exceed planned allocations, with the Ministry of Defense already using funds originally budgeted for the final quarter of 2025 (October–December). These funds are being spent on accelerated procurement of weapons and ammunition, in anticipation of a possible escalation of hostilities before any potential ceasefire or freeze.