Ukraine’s military spending since start of Russia’s invasion exceeds $8B

Ukraine has been forced to spend 245.1 billion hryvnia ($8.3 billion) on its war with Russia instead of development, Finance Minister Serhiy Marchenko said, providing a glimpse into the huge economic cost of Moscow’s February 24 invasion, Report informs referring to Reuters.

The spending -- drawn from some funds initially budgeted for development -- went on everything from buying and repairing weapons to emergency support for internally displaced people, Marchenko noted.

There are 2.7 million officially registered IDPs, according to data from the social policy ministry, although the real figure is many times higher.

The government only collected 60% of its planned tax revenue for April, a shortfall that was topped up to the equivalent of 79.5% by grants from foreign partners, Marchenko told Reuters in exclusive written comments.

Marchenko said that Kyiv urgently needed foreign support to be ramped up as it is being forced to funnel billions of additional dollars into emergency spending.

Marchenko said that Ukraine had received almost $2 billion in external funding in April, of which $719 million had come from grants. The figure for the period since February stands at $5.4 billion, including $801 million in grants, he said.

“If we do not take into account foreign aid, we now estimate the receipt of revenues in May-June at the level of 45-50% of (what was) planned, provided that the situation does not worsen,” Marchenko said.

The $8 billion in war expenses equates to more than a month of total state spending as measured by annual 2021 expenditures of 1.84 trillion hryvnias ($62.28 billion).

Marchenko said Kyiv was discussing various kinds of external financial support.

He listed funds which Ukraine hoped to obtain through a special drawing rights (SDR) account launched by the International Monetary Fund.

Developed countries can direct part of their SDRs to the account.

“Currently, the Finance Ministry team is negotiating with our international partners, in particular, the G7 countries on sending their part of the SDR to support Ukraine,” Marchenko said.

He added that Ukraine expected to receive a loan of about 1 billion Canadian dollars (about $767 million) from Canada in May through the account.

“We urge our partners to provide part of the funds as grants to reduce (our) debt burden which is already growing due to martial law as well as the need for financing,” Marchenko said.