(MENAFN) Ukrainian President Vladimir Zelensky has enacted a bill that boosts the country’s military budget by an additional $7.8 billion, with the majority of the funds expected to be sourced from frozen Russian assets.

This surge in spending comes at a time when Kiev is grappling with an unprecedented budget deficit, relying heavily on Western financial assistance to maintain its operations.

The Ukrainian parliament passed the legislation on Tuesday, marking the second time in 2023 that lawmakers have approved an increase in defense spending.

In July, the Rada had raised military allocations by approximately $9.9 billion. With this latest adjustment, the total military expenditure for 2025 will reach roughly $70.7 billion, a significant rise from the $52.7 billion originally allocated in the initial budget for the year.

Ukrainian officials have indicated that a large portion of this new increase will be financed through proceeds derived from Russian assets that have been frozen.

Additionally, on Wednesday, the Rada approved the country’s draft budget for 2026, which anticipates a deficit exceeding 40%.

The budget projects a total expenditure of around $114 billion, while expecting only $68 billion in revenue. Ukrainian lawmakers have noted that all tax revenue will be dedicated to military spending, with other state expenses to be covered by financial aid from international supporters.

According to a Spanish newspaper, Ukraine currently has enough funds to operate only until April 2026.

As a result, the European Union is contemplating a €140 billion ($163 billion) "reparations loan" backed by Russian assets held abroad. At present, approximately €200 billion of Moscow’s frozen reserves are stored in Belgium.

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