On November 8th, Ukraine’s Cabinet of Ministers approved the draft Law of Ukraine “On the State Budget for 2025.” The budget document outlines substantial allocations for the production of armaments and military equipment as the nation continues to prioritize defense amid ongoing security challenges.
The budget includes 54.55 billion hryvnias (approximately $1.3 billion) allocated for the implementation of state-targeted programs to reform and develop the defense-industrial complex, to create, develop, and implement new technologies, and to expand current production capacities for defense products. Of this sum, 7.6 billion hryvnias are earmarked from the general fund, while the remaining amount will come from a special fund. In comparison, the corresponding allocation for 2024 was just over 51 billion hryvnias, indicating a marked increase in investment into defense capabilities.
Additionally, 500 million hryvnias (approximately $12 million) have been allocated for the implementation of the Defense Industry Enterprise Support Program. This program, designed by the Ministry of Strategic Industries of Ukraine, aims to provide concessional loans to defense-industrial complex manufacturers, both public and private, deemed critical to the functioning of the economy and the overall security of the country during a special period.
Under the program, the interest rate for manufacturers is set at 5%, with the remainder of the interest being subsidized by the state budget. In 2024, 263.4 million hryvnias were allocated for this financial support initiative. The increase in funding for 2025 suggests a concerted effort by Ukraine to boost the defense sector, ensure the resilience of the domestic defense industry, and promote technological advancements within the military production sphere.
The 2025 budget reflects Ukraine’s continued commitment to enhancing its defense capabilities and supporting key enterprises in the defense sector, as the country faces ongoing challenges to its security. By expanding the funding available for both development and production, Ukraine aims to ensure that its armed forces remain well-equipped to defend against Russian aggression.
