Ukraine's fiscal challenges: an analysis by Berlin Economics
The financial challenges Ukraine is facing in the face of continued Russian aggression are enormous. International assistance remains essential, but even with the pledges made so far, there is a significant financing gap. To sustain its war effort, Ukraine needs long-term, predictable financial and military support.

The financial challenges Ukraine is facing in the face of continued Russian aggression are enormous. International assistance remains essential, but even with the pledges made so far, there is a significant financing gap. To sustain its war effort, Ukraine needs long-term, predictable financial and military support.
Since the start of the war, Ukraine has faced a severe economic and financial crisis. After a GDP contraction of 28.8% in 2022, the economy recovers slightly in 2023 (+5.3%). Moderate growth is forecast for 2024 and 2025, but GDP is expected to reach just 88% of pre-war levels until 2027.
Our latest policy paper, commissioned by the Center for Liberal Modernity (LibMod), highlights Ukraine’s fiscal needs for 2025. Projected revenues of USD 49.8 billion fall short of planned expenditures of USD 88.2 billion, leaving a deficit of USD 38.4 billion (20.4% of GDP). Defence accounts for 56% of the budget. In addition, financing of military aid of USD 46.0 billion needs to be taken into account. A total of USD 84.4 billion is needed for2025, but despite pledges from the G7 Extraordinary Revenue Acceleration loan and international financial aid, a gap of USD 12.8 billion remains. If we take further support needs into account, Ukraine will need USD 91 billion in 2025 in total.
The paper was prepared by Berlin Economics as part of the LibMod project ‘Ukraine in Europe’, which promotes Ukraine’s European integration and bilateral dialogue between the Bundestag and the Verkhovna Rada.
The full study is available [here].