Direct funding for security and defense in Ukraine’s draft 2027 state budget amounts to approximately UAH 4.855 trillion, or 66.8% of all planned expenditures, reports the Experts Club information and analytical center.
Including UAH 30 billion in state guarantees, the government declares a total defense resource of UAH 4.885 trillion. Compared with the 2026 plan, this represents an increase of approximately UAH 517.8 billion, or 11.9%.
Most of the increase is allocated to military pay and salaries with related charges, which rise from UAH 1.454 trillion to UAH 1.792 trillion. Meanwhile, the comparable allocation for weapons and military equipment in the Finance Ministry’s presentation remains virtually unchanged at UAH 2.299 trillion, compared with UAH 2.297 trillion in 2026.
Civilian sectors will also receive nominal funding increases. Social spending rises to UAH 540.3 billion, education to UAH 328.5 billion, and healthcare to UAH 292.5 billion. However, part of these increases will be absorbed by projected average annual inflation of 8.6%.
The draft budget also relies on several tax measures that still require legislative approval. In particular, the calculations include an increase in the standard VAT rate from 20% to 21%, expected to generate an additional UAH 58.7 billion. Four proposed tax measures together are expected to raise UAH 117.3 billion.
The macroeconomic forecast assumes real GDP growth of 1.3% in 2027, average annual inflation of 8.6%, and an average exchange rate of UAH 47.1 per US dollar, compared with an expected UAH 44.4 in 2026. The year-end 2027 exchange rate is projected at UAH 48.3 per dollar.
