Ukraine PM warns of $1.5bn budget shortfall as war damage tops $7.7bn

Ukrainian Prime Minister Serhii Shmyhal told the 12th Kyiv International Economic Forum that Russia has intensified attacks on the country's economy, with direct losses now exceeding $7.7 billion and more than one million square metres of real estate damaged or destroyed.

Shmyhal also warned that the state budget is expected to fall approximately $1.5 billion short of projected revenues by year-end.

Despite the shortfall, the government said it continues to run lending programmes. The Affordable Loans 5–7–9% programme has disbursed UAH 580 billion in loans since its launch. A separate loss-compensation programme administered by the Export Credit Agency has enrolled 457 companies, with potential compensation exceeding UAH 9 billion.

The next step, Shmyhal said, is a broader war-risk insurance system to which the government plans to allocate $1 billion, aiming to attract approximately $3 billion more from international partners.

The forum also heard from Taras Kachka, Ukraine's representative to the EU, who stressed the need to accelerate integration into the EU single market and expand what he called the industrial visa-free regime. Business representatives flagged reduced access to European markets, particularly for steel and agricultural exporters facing tighter EU trade restrictions.

Labour shortages were a further theme. Experts at the forum estimated Ukraine has lost approximately 5 million people to migration, leaving companies short of skilled workers.