Even the whole GDP won't cover spending: Ukraine has received US$200bn from its partners, but that isn't enough

The amount of international financing Ukraine has received from its partners since 24 February 2022 has reached the equivalent of the country's 2021 pre-war GDP. In total, Ukraine has raised almost US$200 billion during this period to fund civilian government spending and, more recently, weapons purchases.

Including financing expected by the end of 2026, the total support provided since the start of the full-scale war will significantly exceed Ukraine's pre-war GDP. Yet even this will not be enough to cover all of the state's financial needs.

Ekonomichna Pravda previously reported that the Ukrainian government needs to secure at least UAH 326 billion (about US$7.4 billion) in additional funding for defence spending, although the Ministry of Defence has requested UAH 1.1 trillion (US$24.9 billion) for the final four months of the year. The most likely option is to bring forward part of next year's funding to cover current defence needs.

Ever-increasing aid volumes

The full-scale war dealt a body blow to Ukraine's economy and public finances. From day one of the invasion, spending soared and budget revenues plummeted.

This resulted in an unforeseen deficit in the state budget. To cover it, the authorities made spending cuts, reducing non-priority expenditure, and increased domestic borrowing. But these measures weren't enough, so the government turned to other countries and international organisations for assistance.

Russia's invasion in 2022 came as a surprise not only to Ukraine but also to its Western partners. Some of them, despite having intelligence about preparations for the attack, did not expect Ukraine to hold out for so long. None had budgeted for financing Ukraine's needs.

By the end of 2022, Ukraine had received US$31.1 billion from its partners. The remaining funding gap had to be covered by borrowing from the National Bank of Ukraine (NBU). During the first year of the full-scale war, the NBU issued UAH 400 billion (US$9 billion) to meet the government's financing needs. This enabled the government to fund defence spending, but significantly weakened the hryvnia's purchasing power and accelerated inflation.

In 2023, Kyiv's international partners became more actively involved in financing Ukraine's needs. By then it had become clear that Ukraine needed long-term, multi-billion-dollar support programmes rather than ad hoc solutions. The key programmes are outlined below.

IMF Extended Fund Facility (EFF) – US$15.6 billion. This was the first major lending programme agreed upon during the full-scale war to provide financing over four years. It followed lengthy negotiations and several tranches of emergency financing provided in 2022.

The EFF for Ukraine was the first loan in the IMF's history to be granted to a country engaged in a full-scale war and experiencing extreme macroeconomic uncertainty.

Ukraine ended the programme early in 2025 because its assumptions no longer matched the realities on the ground. During the initial negotiations, the IMF had expected the full-scale war to last 18 months to two years, followed by a recovery phase. Consequently, from 2025 onwards, the programme's financing volumes and structural benchmarks no longer aligned with Ukraine's macroeconomic situation.

Despite its substantial size – almost US$16 billion – the EFF programme largely covered Ukraine's scheduled repayments to the IMF on previous loans. However, it also served as a kind of seal of approval which enabled Ukraine to secure financing from other partners.

In early 2026, the IMF approved a new four-year EFF programme for Ukraine worth US$8.1 billion. As with its predecessor, the amount broadly corresponds to Ukraine's repayments on previous IMF loans.

Ukraine Facility – €50 billion. A four-year EU programme agreed upon at the end of 2023. Of the total, €39 billion is allocated as direct budget support, with the remainder going towards business support and interest payments.

The programme has become one of the EU's key mechanisms for providing financial support to Ukraine and a roadmap for the country's further integration into the EU. Access to financing is tied to a reform plan aimed at advancing EU integration, creating not only a political but also a financial incentive for the authorities to adopt necessary and often unpopular measures.

Extraordinary Revenue Acceleration (ERA) Loans – US$50 billion. The first financial instrument backed by windfall profits from Russian assets frozen in the West. Ukraine began receiving funds under the programme in late 2024.

Funding under the programme has been provided to Ukraine over the last two years by the G7 countries and the EU, in whose jurisdictions around US$300 billion in Russian assets have been frozen. Interestingly, even now no one knows the exact value of these assets. What is known is that the bulk of the funds – more than US$200 billion – is held in accounts at the Belgian securities depository Euroclear.

Financing under the ERA Loans Initiative has been provided by the United States (US$20 billion), the EU (US$20 billion) and other G7 countries (US$10 billion). A distinctive feature of the loan is that Ukraine is not required to repay it unless Russia agrees to pay reparations after the war ends.

Ukraine Support Loan (USL) – €90 billion. The second financial mechanism linked to frozen Russian assets. The loan covers 2026-2027, with €60 billion earmarked for weapons procurement. As with the ERA Loans, Ukraine will not have to repay the USL, as it is backed by the proceeds of frozen Russian assets.

The loan was the subject of long and difficult negotiations during which Ukraine and most EU countries pushed for frozen Russian assets to be used to support Kyiv. Belgium, where Russian central bank assets are immobilised, strongly opposed the move, citing concerns about the "legal consequences".

Using these Russian assets to back the loan was a compromise solution of sorts that enabled Ukraine to cover a significant share of its external financing needs for 2026-2027.

Meanwhile, Ukraine has not abandoned the idea of directly seizing Russian assets and recently sought to reopen discussions on the issue within the EU.

The problem is that after accounting for the funds provided under the ERA Loans and the USL, the amount of frozen Russian assets still available for a new mechanism is rapidly shrinking. If all these assets were transferred to Ukraine, just over half of the amount frozen in the West since the full-scale war began would ultimately reach the Ukrainian budget. The remainder would go to international creditors.

A club of friends

During the early years of the full-scale war, the US played the most significant role in providing financial support to Ukraine. Unlike the programmes offered by the EU, IMF and Kyiv's other partners, US assistance came in the form of grants, meaning it did not have to be repaid.

In 2022-2023 the US provided Ukraine with almost US$22 billion, compared with US$21 billion from the EU. From 2024 onwards, however, America's financial and defence aid to Ukraine became a contentious issue in the presidential election campaign as Donald Trump castigated the White House for its continued financial support for Ukraine.

Since Trump's re-election, the US has not provided Ukraine with direct budget support. However, the EU has adopted large-scale programmes over the last few years to support Ukraine's financial stability.

In addition to the US and the EU, Japan has contributed unexpectedly substantial budget support to Ukraine – almost US$10 billion. Canada, the UK and Germany have provided a further combined total of almost US$11 billion. Germany also plays a pivotal role in financing Ukraine through EU mechanisms, as it is the European Union's largest economy.

The debt trap

Not all the international financing Ukraine has received since the start of the full-scale war has been provided as grants. Most has taken the form of loans, albeit on concessional terms.

That means that this financial support has increased Ukraine's public debt, which according to the Ministry of Finance has more than doubled to US$214.18 billion.

The structure of Ukraine's public debt has also deteriorated significantly during the full-scale war. At the end of 2021, 41.6% of the total was domestic debt and 58.4% was external. Today, the share of domestic debt has fallen to 21.7%, while 78.3% is owed to external creditors.

This structure makes public debt more sensitive to fluctuations in the hryvnia exchange rate and political developments in partner countries, posing additional risks to Ukraine's financial stability.

In the summer of 2024, the government reached an agreement with commercial creditors to restructure its eurobond debt. At the end of 2025, it also restructured its GDP warrants, payouts from which were linked to economic growth. Although the burden on the state budget has been significantly reduced by these measures, it remains substantial.

For example, debt repayment and servicing costs in 2027 will exceed UAH 1 trillion (US$22.6 billion). The government is likely to seek to cover some of these payments through further borrowing. As a result, servicing and repaying wartime debt will remain one of the largest items in the state budget for years, if not decades, to come.

Yaroslav Vinokurov, Ekonomichna Pravda

Translated by Myroslava Zavadska

Edited by Artem Yakymyshyn and Teresa Pearce