Ukraine parliament amends 2025 budget, raises defence spending to wartime record

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By Olena Harmash

KYIV (Reuters) -Ukraine’s parliament voted on Tuesday to amend the country’s budget for this year, raising defence spending to a record level as the war with Russia dragged on into its fourth year.

Lawmakers approved the increase of about 325 billion hryvnias ($7.7 billion), raising Ukraine’s defence spending to a total of about 2.96 trillion hryvnias ($70.86 billion) this year.

“We understand that the situation is constantly changing, and it is a forced necessity to increase spending to resist aggression effectively,” Finance Minister Serhiy Marchenko said.

“The government, with the support of the partners, has the sources to secure additional spending for Ukraine’s defenders.”

PART OF SPENDING TO BE COVERED BY G7 LOAN

This is the second time this year that Ukraine has had to boost its spending for the army and weapons production. The first changes were passed in July when defence spending was raised by about 412.4 billion hryvnias ($9.87 billion).

Ukraine’s 2025 budget had initially planned for about 2.2 trillion hryvnias in defence spending.

Fierce combat is raging along more than 1,200 km (750 miles) of the frontline, and demand for ammunition and weapons keeps growing as Ukraine fights on to maintain defence lines against a much larger and better-equipped enemy.

Government officials said that a part of the required amount would be covered with the funds provided from a loan agreed by the Group of Seven member countries and backed by the earnings from frozen Russian sovereign assets.

Ukraine has already received $28 billion under this loan this year.

“Importantly, interest from frozen Russian assets will be spent on defence,” Prime Minister Yulia Svyrydenko said. “Russian assets are being used fairly, as they should be – to support the Ukrainian military.”

Russia’s invasion devastated Ukraine, with thousands killed, millions of people fleeing the fighting, cities and infrastructure bombed and ruined.

Ukraine vitally depends on financing from its Western partners as the country spends the bulk of its revenues to fund its defence. The government pays for its social and humanitarian spending thanks to Western financial support.

Finance ministry data showed in the first nine months of the year, the government spent more than 63% of its total budget to fund the army.

Since the start of Russia’s invasion in February 2022, Ukraine has received about $152 billion in foreign financial aid from its allies.

($1 = 41.7754 hryvnias)

(Additional reporting by Yuliia Dysa; Writing by Olena Harmash, Editing by Alison Williams)