In 2024, Ukraine's economy grew by almost 4%, and one third of this growth was provided by the defense-industrial complex (DIC). While in the first year of Russia's full-scale invasion, Ukrainian arms production was estimated at about $1 billion, last year's output of weapons and military equipment approached $10 billion, according to BBC News Ukraine, as reported by Dengi.ua .
"For two years, the production of weapons has increased tenfold," - noted to the publication the Executive Director of the Office of effective regulation BRDO Oleksiy Dorogan.
It is noted that such a rapid development of the industry was possible due to a sharp increase in the state order: from 70 billion UAH in 2022 to 1.5 trillion UAH in 2025, as reported by the executive director of the Ukrainian Council of Armorers (USO) Igor Fedirko.
It is reported that defense and security spending has remained at a high level since the beginning of the war - about 30% of GDP in 2022 and 26-27% of GDP in 2025. The changes concern not only the scale of production, but also its quality: private companies are more actively involved, the number of enterprises working according to NATO standards is growing, and production cycles have significantly accelerated.
At the same time, according to Defense Minister Denis Shmigal, about 40% of armaments for the AFU are supplied by Ukrainian manufacturers, and President Volodymyr Zelensky has set the task to bring this figure to at least 50%.
According to the newspaper, the military-industrial complex remains a high-tech sector that stimulates the development of related industries - mechanical engineering, electronics, IT and logistics, as well as contributes to European integration through participation in EU and NATO programs, adaptation to their standards and creation of joint production facilities.
According to the data, two thirds of Ukrainian manufacturers are interested in investments, including in R&D. Among companies with existing foreign investments, 90% plan to attract additional funds. Dorogan calls the DIC "an ecosystem of innovation, jobs and investment." Ukraine offers competitive production costs, qualified personnel and a favorable legal regime with tax and customs preferences.
At the same time, the country is actively creating R&D centers developing drones, electronic warfare systems, air defense systems, electronics and artificial intelligence solutions.
"Now Ukraine is gradually turning into a real "Defense Valley" - an environment where innovations emerge quickly, and the state creates special conditions for the development of companies and investors," Dorogan said.
In recent years in Ukraine:
- About 500 new models of equipment and weapons have been adopted.
- More than 800 enterprises with a total staff of 300 thousand people operate in the industry.
- According to estimates, the annual production volume in the industry already this year could reach about $35billion.
In addition, the advantage is the unique experience of combat use, which allows to finalize products based on feedback from the front.
At the same time, Fedirko warns that foreign investors' incomplete understanding of the realities of the modern battlefield may hinder the attraction of capital. According to him, the average utilization rate of the defense industry enterprises now does not exceed 30%.
Experts believe that the defense industry has become a key driver of the economy, capable not only of providing the front line, but also of setting the pace for the entire industry. According to forecasts, in the future Europe may increase financing of Ukraine from $40 billion to $110-120 billion per year, compensating for the possible decrease in support from the United States.
Although the potential of the defense industry is far from exhausted, with stable financing, technological development and renewed exports, the sector is capable of scaling up. However, as Fedirko emphasizes, it is important to anchor the current achievements in a sustainable industrial policy in order not to miss the moment.
