Why Ukraine unexpectedly faced a $27 billion defense budget gap

Amid intensifying Russian missile and drone attacks and the rising cost of the war, Ukraine is facing both a shortage of air defense interceptors and an unexpected $27 billion gap in its defense budget that needs to be filled by the end of the year.

CES Executive Director Hlib Vyshlinsky explained the reasons behind the shortfall in comments to The Washington Post. By the end of June, the Ukrainian government and its international partners believed that a significant funding gap would emerge in 2027 and that the needs for 2026 had already been covered.

“Then late August comes and there was this huge gap,” Hlib said.

One reason was the decision to increase military salaries this summer. These costs were not initially included in the budget, although, as Hlib noted, the increase was long overdue. The chaos that followed the dismissal of Defense Minister Mykhailo Fedorov may also have contributed to the situation.

Another factor was a drop in international military aid. According to Hlib, this drove up Kyiv’s need for weapons spending. Kiel Institute data show that the total military allocation to Ukraine was about $26.1 billion in the first half of 2025, while in the first half of 2026 it had dropped to about $19.6 billion.

Hlib also placed some of the blame for the shortfall on Ukraine’s international partners, comparing budget negotiations to “a Turkish bazaar.”

“Everyone expected that the E.U. loan would cover all of Ukraine’s needs. But it did not,” Hlib said. “They want to spend as little money as possible.”

Source: The Washington Post