Ukraine has a reserve of foreign aid for the year ahead

For the first time since the beginning of the invasion, Ukraine has a reserve of foreign aid for at least a year in advance. Thanks to the $50 billion ERA program, Ukraine will fully cover its budget deficit - $38 billion - in 2025 with russian assets.

At an event organized by CES, Volodymyr Tsabal, secretary of the Verkhovna Rada Budget Committee, said that the parliament could allocate an additional $5-7 billion for defense from frozen russian assets.

According to him, the Rada is considering three scenarios for allocating the financial cushion:

spend the entire additional $25 billion on security and defense;

live within the 2025 budget and transfer these funds to 2026;

a realistic middle option - to spend part of it ($5-7 billion) this year and postpone the rest.

The MP recalled that in each previous year, the budget planned much lower spending on the security and defense sector than was actually spent at the end of the year. For example, in 2024, half a trillion hryvnias were added in the middle of the year.

“In 2025, spending on the security and defense sector is only 3% higher, while the projected inflation rate is 9%. This means that funding will decrease by 6% in real hryvnias. Does this mean that we will buy 6% less weapons or cut funding for the army? Of course not,” Tsabal said.

The MP believes that at least $5-7 billion of these $25 billion are expenses “that the Ministry of Finance and the Cabinet of Ministers already have in mind.”

The question of about $17-20 billion remains. According to Tsabal, the right decision is to balance the scenarios: to spend a significant part of the funds on weapons and army funding, since in 2025, partner assistance in military equipment is less than in 2024.

At the same time, since the only confirmed source of funding for 2026 is the Ukraine Facility, part of these funds ($5-10 billion) should be reserved to at least partially cover the future budget deficit.

Source: Unian