Economic and mathematical modelling of the development of Ukraine's defence-industrial complex under the transformation of the global arms market

Анотація

The article develops an economic and mathematical model for assessing the prospective transformation of Ukraine's defence-industrial complex under the conditions of a wartime economy, high dependence on imported weapons and military equipment, and structural shifts in the global arms market. The relevance of the study is determined by the fact that, for Ukraine, defence expenditure is not only a budgetary burden but also a mechanism for reproducing technological sovereignty, mobilising industrial capacity, preserving engineering competencies and shaping a new model of security-oriented economic development. The purpose of the article is to provide a theoretical and methodological justification for a model that integrates nominal GDP, the military burden, the procurement component of defence spending, the localisation coefficient, domestic output of the defence industry, import requirements and the defence-industrial self-sufficiency index. The proposed model formalises the transition from an import- and donor-dependent configuration of military supply to a system based on localised production and controlled international industrial cooperation. The empirical basis of the study consists of open statistical and analytical data from SIPRI, the Ministry of Finance of Ukraine, Kyiv School of Economics, the IMF, the World Bank and peer-reviewed international publications with DOI identifiers on the relationship between military expenditure, arms trade and economic growth. Under the baseline scenario, the demand for weapons and military equipment in 2025 is estimated at UAH 654 billion, domestic defence-industrial output at UAH 327 billion, and import requirements at UAH 327 billion. By 2030, provided that the localisation coefficient increases to 85%, domestic output may reach UAH 567 billion, while import requirements may decline to UAH 100 billion. The self-sufficiency index rises from 1.0 to 5.67, indicating a qualitative change in the economic role of Ukraine's defence-industrial complex. The scientific novelty lies in constructing an applied model adapted to Ukraine's current conditions, in which defence expenditure is interpreted not only as a resource for immediate military capability but also as a driver of industrial modernisation. The practical value of the results lies in the potential application of the model to medium-term budget planning, prioritisation of import substitution, assessment of technological partnership needs and formulation of a national strategy for the development of Ukraine's defence industry.

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