Ukraine Proposes Record Defense Spending for 2027: 4.89 Trillion Hryvnia as War Costs Rise

Defense spending will make up about two-thirds of the total 7.27 trillion hryvnia in the 2027 draft budget, presented Wednesday to the Ukrainian parliament. Budget revenues are projected at 5.6 trillion hryvnia.

“This is the sixth full-scale war budget, and it is again bigger than the previous one. Over these years, the war has become more expensive,” said the chair of the parliamentary budget committee, Roksolana Pidlasa, adding that state revenues “are not growing at the same pace as spending.”

The daily cost of the war has risen to $190 million this year, compared to $116 million in 2022, when the Russian invasion began, Pidlasa said.

Finance Minister Sergii Marchenko told deputies that Ukraine will need more than $52 billion in international financial assistance next year. The government has secured commitments from partners for about $20 billion and is in talks over the remaining amount. Marchenko said frozen Russian assets held by Ukraine’s European allies could become a key source to cover the 2027 budget gap.

Ukraine’s financial situation has become more complicated this year, as Russia intensified attacks on Ukrainian businesses and infrastructure, the finance minister said. For now, Ukraine faces an unfunded gap of $27 billion in defense spending for this year, as the country seeks to raise army salaries and increase weapons production. Since the start of the invasion, Ukraine has received about $198 billion in fiscal assistance from foreign partners, most of it from the European Union.

To secure smooth financing from partners, Kyiv must push through tax and governance reforms. On Wednesday, parliament approved in first reading a draft law to impose taxes on parcels from abroad, moving closer to fulfilling one of the key conditions to unlock funds from the International Monetary Fund and the European Union — a step that paves the way for about 4 billion euros in EU macro-financial support. Lawmakers have until October 1 to review the draft budget and submit proposals; the spending plan must be approved in three readings by December 1.

Source: Reuters