Ukraine Seeks $40 Billion in External Support for 2026 Economic Stability

Ukraine is poised to need over $40 billion in external financial support in 2026 to keep its economy afloat and continue its military operations, as indicated by Prime Minister Denys Shmyhal on July 9. The prime minister highlighted the importance of developing new mechanisms to attract such vital funds, stating on Telegram, "The key task should be to develop mechanisms and tools that will allow us to attract these funds." This announcement comes as Ukrainian officials work hard to secure long-term financing, particularly in the lead-up to co-hosting the Ukraine Recovery Conference set to take place in Rome from July 10-11. In June, the government proposed amendments to the national budget aimed at an increase in defense spending by nearly $10 billion, which would elevate total military expenditures for 2025 to around $50 billion—equivalent to 26% of Ukraine's GDP. Shmyhal emphasized that these funds would significantly boost the country's ability to counter adversarial threats, noting that the defense budget includes $16.4 billion allocated for arms procurement. While the total expected budget revenues stand at $48.5 billion, the government is reported to have already secured $22 billion in foreign financing for the year 2025. Recent reporting from the Financial Times has suggested a likely budget deficit ranging from $8 billion to $19 billion for 2026, attributed largely to a decrease in contributions from the United States and the persisting conflict in Ukraine. A senior EU official noted a shift in expectations among donors, who previously anticipated a potential peace agreement in 2025. Now, they are compelled to reassess their funding strategies in light of Russia's ongoing military actions and refusal to agree to an unconditional ceasefire.