Ukraine will need an additional $67.4 billion in international financial assistance between 2027 and 2029, the KSE Institute said in a new macroeconomic report.
The institute updated its baseline scenario to assume that full-scale hostilities will continue at least until the second half of 2027, later than previously expected. As a result, a gradual reduction in military spending would not be possible before 2028, and defence costs alone would exceed earlier forecasts by $43 billion in 2027.
The ERA mechanism, which draws on profits from frozen Russian assets, and the European Union's Ukraine Facility funds are both set to be fully disbursed by the end of 2027. That will leave the budget facing a funding shortfall in 2028 and 2029 that the EU's 90-billion-euro Ukraine Support Loan does not cover, the report said.
KSE Institute analysts warned that if the additional $67.4 billion cannot be secured, Ukraine's ability to defend itself against Russian aggression would be at risk. The government would then be forced to resort to extraordinary measures such as monetary issuance, which would deplete the country's macroeconomic buffers and leave post-war reconstruction critically underfunded.
The analysts also warned that a longer war would increase risks to Ukraine's macrofinancial stability and creditworthiness.
Ukraine asked the European Union as early as 2025 to provide long-term assistance within its next seven-year budget framework, the Multiannual Financial Framework covering 2028 to 2034.
