Ukraine submits 2027 draft budget: 44% of GDP for defense, no raise for military pay

Why it matters

The 2027 draft sets the financial framework for a country at war, with defense and security absorbing nearly 44% of GDP and the overall budget reaching 7 trillion 272 billion hryvnias in expenditures. A projected financing gap of $52.6 billion means Ukraine still depends on international partners to balance its books, and Prime Minister Koretsky has warned that delays in parliament could put $29.5 billion in aid at risk. The draft's social measures — a 10.4% minimum-wage increase, new spending on education, healthcare, veterans, and internally displaced persons — will directly affect living standards, while the absence of a military pay raise for a fifth year is already drawing sharp criticism from lawmakers.

What happened

On the evening of 15 September 2026, Ukraine's Cabinet of Ministers approved the draft State Budget for 2027 and submitted it to the Verkhovna Rada, where it was registered as bill №16000. Defense and security spending is set at 4 trillion 885 billion hryvnias, roughly 44% of GDP and 11.9% higher than in 2026. Budget revenues are projected at 5 trillion 648 billion hryvnias (+8.7% vs 2026) and expenditures at 7 trillion 272 billion hryvnias (+13.5%), leaving a financing gap that the government estimates at $52.6 billion in international support.

The draft raises the minimum wage from 8,647 hryvnias in 2026 to 9,546 hryvnias from 1 January 2027 (+10.4%) and increases the general subsistence minimum to 3,559 hryvnias. Education receives 328.5 billion hryvnias (including 235.3 billion for teacher salaries, with experienced teachers' average pay projected at 27,300 hryvnias, up 65% from 2025). Healthcare receives 292.5 billion hryvnias, of which 225 billion is for the Medical Guarantees Programme, with target average salaries of at least 30,000 hryvnias for specialized doctors and 20,000 hryvnias for nurses. Business support programmes get 96 billion hryvnias — nearly double the 2026 figure — covering affordable loans, the eOselya housing programme, defence innovations including Brave1, grants, and war-risk insurance.

Social-policy spending also expands: 540.3 billion hryvnias for social payments and Ministry of Social Policy measures (including 292.8 billion for pension top-ups and 66.4 billion for support and prosthetics for persons with disabilities); 83.2 billion hryvnias for internally displaced persons; and 20.5 billion hryvnias for veteran policy, with 12.2 billion earmarked for reintegration. Within the defense allocation, 1.8 trillion hryvnias is earmarked for military salaries (+337.5 billion), 2.3 trillion for weapons and military equipment, 264.9 billion as a reserve, 30 billion in state guarantees for armament, and 499.9 billion for other defense expenditures.

Prime Minister Serhiy Koretsky described the document as 'a budget of a country at war' and said partners are expected to provide at least 1 trillion hryvnias in additional material-technical assistance in 2027 — more than in 2026. He also acknowledged that defense needs are significantly higher and exact figures are still being finalized. The bill has been sent to the Verkhovna Rada's Budget Committee for consideration.

How Ukrainian sources describe it

Ukrainian media uniformly frame the submission of the 2027 draft budget as a major political and economic event tied to wartime financing. Coverage emphasizes the headline defense figure of 4 trillion 885 billion hryvnias (~44% of GDP) as evidence of the war's financial scale. Multiple outlets prominently feature MP Yaroslav Zheleznyak's critique that the draft does not raise military pay and that non-military payroll funds grow far faster than military salaries — a point he described as 'the greatest shame of the budget policy.' Agencies frame the document through statements by Prime Minister Serhiy Koretsky, Finance Minister Serhiy Marchenko, and Defense Minister Yevheniy Khmara, stressing the 'critical' financial situation and the need for timely parliamentary action to unlock international aid. Reports also highlight the planned minimum-wage increase (to 9,546 hryvnias) and new social spending on veterans, internally displaced persons, education and healthcare as concrete citizen-facing improvements.

Where reporting differs

Sources disagree on when the draft budget appeared on the parliamentary site: one article dates the bill's registration under №16000 to a Tuesday evening (15 September), while another reports the bill appearing on the parliament's website on 15 August. Articles also differ on the headline defense figures: one reports 4 trillion 885 billion hryvnias for defense and security overall (~44% of GDP), while another reports 1.02 trillion hryvnias specifically for maintaining the Armed Forces — these refer to different budget lines, but the contrast has been presented as inconsistent. One article contains an apparent typo, stating the defense allocation as '4 trillion 885 million hryvnias' instead of '4 trillion 885 billion hryvnias.'

Background

Under Ukraine's Budget Code, the government must submit the next year's draft state budget to parliament by 15 September. Throughout 2026 the Cabinet repeatedly amended the state budget to cover shortfalls in military payments, with the deficit on this line estimated by MP Yaroslav Zheleznyak at 100–190 billion hryvnias. In June 2026, defense outlays were increased by 1.56 trillion hryvnias (more than 1.45 trillion of which was intended for military monetary support), and in September 2026 the Cabinet redistributed an additional 33.6 billion hryvnias for military pay. Finance Minister Serhiy Marchenko described the situation as the most tense since the start of Russia's full-scale invasion in 2022; Defense Minister Yevheniy Khmara reported a $27 billion defense funding deficit. State debt at the end of 2027 may exceed 12.3 trillion hryvnias, and the draft envisages a budget deficit of about 15% of GDP.