Slowing reforms in Ukraine could lead to an international financing deficit in 2026.

Ukraine risks facing a severe shortfall in external funding as early as next year if Russia continues its intense attacks and the government delays reforms that have been agreed upon with international creditors. In 2026-2027, Ukraine will need about $65B annually, but only 33% of this has been confirmed at this point.

The main issue is the slowdown in some institutional reforms that depend on new tranches from the EU (€50B through the Ukraine Facility) and the IMF ($15.5B). These reforms include choosing judges for the High Anti-Corruption Court, reforming the ARMA, and appointing the head of the Bureau of Economic Security.

Delays have already caused Kyiv to receive only €3B in the second quarter of the year rather than the planned €4.5B under the Ukraine Facility program. Ukrainian officials, however, promise to realign with the reform schedule. Ukraine’s military spending remains at a record level – 31% of GDP (€2.6T), and even if a conditional ceasefire occurs, it will be difficult to significantly reduce it, especially as Russia is increasing its defense budget. Experts believe the government will need to seek an additional $10-15B for 2026 on top of the funds already pledged by Ukraine’s partners.