Ukrainian Defense Budget Breakdown (2017 – 2026)
In 2021, Ukrainian defense expenditure was valued at $4.2 billion, compared to $2.6 billion in 2017. Between 2017 and 2021, Ukrainian defense expenditure increased at a CAGR of 12.93%. Ukraine’s gross defense expenditure is projected to increase rapidly over the forecast period, as the military needs greater funding for the ongoing conflict in the Donbass region, Black Sea, and Azov sea. The insurgency in the Donbass region and Black Sea by Russian armed forces has forced Ukraine to boost its overall defense preparedness and the country is expected to heavily invest in refurbishing and repairing its military equipment, much of which is in a state of disrepair.
Over the forecast period, Ukrainian defense expenditure is anticipated to grow from $4.3 billion in 2022 to $6.4 billion in 2026, registering a CAGR of 10.05%. Over the forecast period, Ukrainian cumulative spending on defense is anticipated to be $26.4 billion.
Having borne the brunt of Russian military aggression in Crimea and the country’s ongoing interference in the Donbass region and along the Ukrainian borders, Ukraine faces a very high level of threat from a revisionist Russia. The Russian invasion and subsequent occupation of Crimea was a precursor to a large-scale Russian-sponsored insurgency in the Donbass region in Eastern Ukraine and the country continues to face a significant Russian military presence along its eastern frontier. The Russian forces recent buildup along the borders of Ukraine and in the Black Sea has intensified conflict between these two countries. Ukrainian defense expenditure valued $4.2 billion in 2021, of which $674.9 million was allocated to capital expenditure, which includes the acquisition of military hardware and technology, and the cost of research and development, procurement, and the storage of weaponry and equipment.
The current military situation in Ukrainian borders is expected to fuel an increase in capital expenditure over the forecast period. The Ukrainian defense ministry is expected to spend $692.4 million in 2022, which is anticipated to increase at a CAGR of 9.65% to reach $1.00 billion by 2026.
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