Ukraine to spend 3.5 times more on defense than Israel – over 30% of GDP in 2025

Ukraine is preparing an unprecedented defense budget: UAH 2.6 trillion or 31.1 % of projected GDP. For the first time in history, no country has ever allocated so much to security — even Israel, despite all its challenges, spends only 8.8 % of GDP. Why is Kyiv taking such steps and how will this affect the economy and society?

This was reported on July 21, 2025 by MP Roksolana Pidlasa, Chair of the Parliamentary Budget Committee, on the Verkhovna Rada of Ukraine website.

Budget Adjustment and Draft Law No. 13439‑3

On July 16, 2025, the Verkhovna Rada adopted in the first reading Draft Law No. 13439‑3. It increases defense appropriations by UAH 400 billion, bringing the total to UAH 2.6 trillion.

• In the first half of the year, defense and security expenditures absorbed 62.5 % of the general fund of the budget.
• After the amendments are adopted, the share will be 59 % of the general fund and 66 % of all budgetary funds.

Ukraine’s defense spending in 2025 will reach 31.1 % of projected GDP, once again making the country the world leader in the share of spending on this sector of the economy.

For comparison: Israel, which ranks second in the world in terms of defense budget, spends 8.8 % of its GDP on this sector.

Despite Israel’s significantly larger economy, in 2024 Ukraine allocated approximately $20 billion more to defense than Israel.

“The financial resource for national security and defense will amount to 31.1 % of projected GDP this year. This is the highest figure in the world. For comparison, the second place in the world is held by Israel, which spends 8.8 % of its GDP on defense. Of course, one can argue that Israel’s nominal GDP is higher than Ukraine’s, but even in absolute terms last year Ukraine spent $20 billion more on defense needs than Israel,” Pidlasa said.

Moreover, according to the Committee Chair, Ukraine directs an extremely large portion of its budget to the security and defense sector:

“In the first half of the year, expenditures for the protection of our state amounted to 62.5 % of all expenditures of the general fund of the state budget, and after the changes adopted by parliament, they will amount to 66 % of all expenditures.”

Facts Without Fiction

• 31.1 % of GDP — the maximum percentage of defense spending in the world for 2025.
• 8.8 % of GDP — the analogous figure for Israel in 2024.
• $20 billion — the approximate excess of Ukrainian spending over Israeli spending in 2024.
• $140–150 billion — Russia’s annual military budget, against which Ukrainian spending is compared.

People’s Deputy Roksolana Pidlasa stated:
“The largest increase in expenditures will affect the Armed Forces of Ukraine, as the most numerous military formation of the Defense Forces — it is proposed to add more than UAH 318 billion to the needs of the Armed Forces of Ukraine. These funds will be directed to the monetary and material support of servicemen, as well as to the procurement and modernization of military equipment and armaments.”

Why Is Ukraine Making Such Expenditures?

1. Military aggression by Putin’s Russia. Ukrainian authorities believe that without powerful armaments, it is impossible to stop the advance.
2. Self‑financing. Almost all international aid goes to social support, not to equipment and ammunition.
3. Priority of national security. The state is ready to sacrifice part of civilian programs to protect its territories.

The Social Price

A high share of the budget on defense is reflected in the civilian sector:

• Reduction in funding for free education and healthcare.
• Increase in domestic debt due to borrowings.
• Higher tax burden on businesses and citizens.

Can Ukrainians endure the economic burden for the sake of the front? This is the question every family affected by the conflict asks itself.

Risks and Prospects

• Inflation risk. Large borrowings affect the hryvnia’s exchange rate and loan costs.
• Long‑term obligations. Part of the loan will have to be repaid by future generations.
• Benefits from modernization. Ukrainian industry receives orders for the repair and production of equipment.

Will this approach become a lesson for Europe and NATO in the future? Or will Ukraine face a “budgetary breakdown” in civilian projects?

Against the backdrop of constant threats, a state’s survival primarily depends on combat readiness. Ukraine has chosen the path of maximum resource mobilization, risking social stability.

NAnews – Israel News will continue to monitor developments.