Ukraine spends around a third of its entire economic output on defence and relies on tens of billions of dollars of financial assistance from its Western allies to keep its economy afloat.

Speaking at a conference in Kyiv, Ukraine's Defence Minister Denys Shmygal said his country risked losing more land to Russia if it continued to be outspent on the battlefield.

"I should say that if the war will continue, we will need a minimum of $120 billion for the next year," Shmygal said.

Even if the war ended, Ukraine would need a similar amount just to keep its army in good form, "in case of secondary aggression from the Russian side", he added.

He suggested confiscating Russian assets frozen in the West to pay for the defence spending, saying Ukrainians were already shouldering a significant tax burden after three-and-a-half years of war.

Russia says any attempt to seize its assets amounts to theft and will incur consequences.

EU chief Ursula von der Leyen on Wednesday proposed using frozen Russian assets to fund a "reparations loan" for Ukraine, but said the 27-member bloc would not seize the assets themselves.