Ukraine is facing its biggest budget crisis since Russia's full-scale invasion began in 2022, with soaring war costs and shrinking tax revenues leaving a $56-billion hole in state coffers — roughly a quarter of economic output.
The strain is visible in Kryvyi Rih, President Volodymyr Zelenskiy's industrial hometown of 600,000 people. Russian airstrikes have brought its huge steel plant and mines to a standstill, and last month ArcelorMittal's sprawling complex, the city's largest employer, suspended operations after missile strikes.
"In Kryvyi Rih, the situation is actually worse than anywhere else, apart from the front line itself," Mayor Oleksandr Vilkul said. "It's about survival. Right now, we need to survive."
War costs more, revenue shrinks
The scene repeats across a steel industry that once generated a tenth of economic output: exports have stopped; this summer's Russian strikes destroyed factories and warehouses, damaged ports and railways, and forced businesses to shut for hours at a time.
Meanwhile the war keeps getting dearer: a day of fighting cost $140 million two years ago but $190 million now, according to Roksolana Pidlasa, head of parliament's budget committee. Costlier long-range weapons, a larger army wage bill and support for military families are driving the rise.
In the first nine months Ukraine spent over $44 billion on defence but raised only about $42 billion in tax revenue. Russian attacks cost the budget 49.5 billion hryvnias ($1.1 billion) in lost tax revenue — likely 70 billion by year-end.
Reforms delay billions in aid
Billions in foreign loans are delayed because Kyiv has not passed the tax and anti-corruption bills Western allies demand. Prime Minister Sergii Koretskyi says $29.5 billion in foreign aid is at risk. He wants all the bills cleared by October 15: "Only then we will get all the money. This is absolutely vital."
Officials met European partners in Brussels about front-loading a €90-billion EU loan — but three sources said that could deepen pressure next year, when elections in France and Poland may erode support.
A record budget and a €210-billion question
The government has proposed a record $110-billion defence budget for next year, excluding direct military aid, with Finance Minister Sergii Marchenko putting the unfunded gap above $32 billion. Part of the answer, he says, is the €210 billion of frozen Russian central bank assets immobilised in Europe. Agriculture — Ukraine's biggest export earner — has also been battered: grain exports fell 36.6% in September, putting about $40 billion of export revenue at risk. Growth is now expected at 0.5% to 1.5% this year, down from 1.8% in 2025.
Sources: Reuters: Ukraine scrambles for money to fight war as Russian strikes batter economy
The strain is visible in Kryvyi Rih, President Volodymyr Zelenskiy's industrial hometown of 600,000 people. Russian airstrikes have brought its huge steel plant and mines to a standstill, and last month ArcelorMittal's sprawling complex, the city's largest employer, suspended operations after missile strikes.
"In Kryvyi Rih, the situation is actually worse than anywhere else, apart from the front line itself," Mayor Oleksandr Vilkul said. "It's about survival. Right now, we need to survive."
War costs more, revenue shrinks
The scene repeats across a steel industry that once generated a tenth of economic output: exports have stopped; this summer's Russian strikes destroyed factories and warehouses, damaged ports and railways, and forced businesses to shut for hours at a time.
Meanwhile the war keeps getting dearer: a day of fighting cost $140 million two years ago but $190 million now, according to Roksolana Pidlasa, head of parliament's budget committee. Costlier long-range weapons, a larger army wage bill and support for military families are driving the rise.
In the first nine months Ukraine spent over $44 billion on defence but raised only about $42 billion in tax revenue. Russian attacks cost the budget 49.5 billion hryvnias ($1.1 billion) in lost tax revenue — likely 70 billion by year-end.
Reforms delay billions in aid
Billions in foreign loans are delayed because Kyiv has not passed the tax and anti-corruption bills Western allies demand. Prime Minister Sergii Koretskyi says $29.5 billion in foreign aid is at risk. He wants all the bills cleared by October 15: "Only then we will get all the money. This is absolutely vital."
Officials met European partners in Brussels about front-loading a €90-billion EU loan — but three sources said that could deepen pressure next year, when elections in France and Poland may erode support.
A record budget and a €210-billion question
The government has proposed a record $110-billion defence budget for next year, excluding direct military aid, with Finance Minister Sergii Marchenko putting the unfunded gap above $32 billion. Part of the answer, he says, is the €210 billion of frozen Russian central bank assets immobilised in Europe. Agriculture — Ukraine's biggest export earner — has also been battered: grain exports fell 36.6% in September, putting about $40 billion of export revenue at risk. Growth is now expected at 0.5% to 1.5% this year, down from 1.8% in 2025.
Sources: Reuters: Ukraine scrambles for money to fight war as Russian strikes batter economy
