Ukraine parliament backs $9.8 billion boost to defence spending as war drags on

By Olena Harmash

KYIV (Reuters) -Ukraine's parliament gave its initial approval on Wednesday to an extra $9.8 billion in budget spending for the army and defence this year as the war against Russia drags on with no end in sight.

Parliament passed the budget amendments in the first reading, raising the 2025 budget's record defence spending of 2.2 trillion hryvnias ($53.2 billion) by another 412 billion hryvnias ($9.8 billion), lawmakers and the finance ministry said.

"The need to amend the 2025 state budget is dictated by the need to provide the defence forces with additional weapons, ammunition, and military equipment," the finance ministry said in a statement.

Roksolana Pidlasa, the head of the parliament budget committee, said that about 216 billion hryvnias would be channeled to purchasing and producing more weapons.

The government plans to raise additional funds by borrowing more on the domestic debt market. It also expects higher tax revenues following Kyiv's decision last year to increase various taxes, the finance ministry said.

As Russian forces continue their grinding advance in Ukraine's east, claiming village after village over the past several months, and attempts at peace talks failing to deliver results, Ukraine and Russia are also locked in an economic contest, analysts said.

Ukraine's economy has been relatively resilient during nearly three and a half years of war due to local businesses' adaptability and billions of dollars in foreign aid from Kyiv's Western allies.

Finance Ministry data showed that Ukraine had received more than $135.4 billion in foreign financial aid since the start of Russia's invasion in February 2022.

Russia's invasion in 2022 reduced Ukraine's GDP by about 29% but the economy posted a modest growth in 2023 and 2024. This year, economic growth is forecast at about 2.7%, the government said.

But Russia's economy is significantly larger.

Russia hiked state spending on national defence by a quarter in 2025 to 6.3% of gross domestic product, the highest level since the Cold War. Defence spending accounts for 32% of Russia's total 2025 federal budget expenditure.

($1 = 41.8965 hryvnias)

(Reporting by Olena HarmashEditing by Ros Russell)