Growth of Ukraine’s Defense Industry During Wartime: Budget, Production, Innovations

During the full-scale war, funding for the development of Ukraine’s defense industry has increased more than ninefold. Initially, in 2022, ₴2.5 billion was allocated for the defense industry, but after the budget review, this amount rose to ₴7.7 billion. In 2023, expenditures reached approximately ₴12 billion, and by 2024, they are projected to be ₴39.6 billion. The state budget for 2025 allocates ₴54.6 billion, but according to revised plans, this amount will reach a record ₴84.5 billion — the largest funding amount throughout the war. For 2026, ₴44.4 billion is earmarked for the development of defense technologies.

This is reported by AgroReview

Increase in Production Capacity and Industry Innovation

Since 2022, the production capabilities of Ukraine’s defense industry have grown 35 times and are now valued at $35 billion. The Ukrainian defense ecosystem currently unites nearly 900 enterprises, including about 100 state-owned and 800 private companies, as well as over 1,000 teams of engineers and developers who work daily on new technologies. Significant progress has been made in the production of missiles and unmanned aerial vehicles. Among the leaders are the “Flamingo” cruise missile with a range of up to 3,000 km, the “Long Neptune” with a range of 1,000 km, and the “Hell” drone missile, which can reach speeds of up to 700 km/h. Prior to this, the “Palyanytsia” drone missile was developed, featuring a warhead weighing approximately 100 kg. Both types are already being produced in series.

Expansion of Drone and Artillery System Production

The domestic defense industry is actively ramping up the production of long-range drones. Each year, around 4 million drones of various types are manufactured in Ukraine, while the production potential allows for these volumes to be doubled. Additionally, during the years of war, the production of the 155 mm self-propelled artillery systems “Bohdana” has significantly increased — from 6 units per month in December 2023 to 40 in October 2025.

Today, over 40% of the weapons on the front lines are of Ukrainian production. However, Ukraine is also developing joint projects with foreign partners and attracting international investments for further scaling of production. Currently, 25 foreign companies are at various stages of localizing their production capacities in Ukraine.

In the 2025 state budget, ₴54.6 billion was allocated for the development of the defense industry, but according to the revised plan, the amount has increased to ₴84.5 billion, which is the highest figure in the years of the great war.