Ukraine submits draft 2026 budget amid rising financing gap projections
Ukraine’s Cabinet of Ministers approved on Sept. 15 the draft State Budget for 2026 and submitted it to the parliament for consideration, Prime Minister Yuliia Svyrydenko announced.
The move comes as the International Monetary Fund reportedly warned that Ukraine’s financing needs over the next two years could exceed government estimates by $10–20 billion.
The projected budget deficit stands at 18.4% of GDP, with the need for external financing estimated at Hr 2.079 trillion ($49 billion).
Ukraine is heavily reliant on Western support for budget support. Then-Prime Minister Denys Shmyhal said on April 25 that Kyiv expected to receive over $39 billion in confirmed budget support from international partners in 2025. The U.S. began reducing how much it gave in October 2023.
While the government in Kyiv maintains its previous estimate of needing up to $37.5 billion annually, the IMF believes the requirement could be $10–20 billion higher, Bloomberg reported last week.
Disagreements reportedly emerged during IMF staff meetings in Kyiv last week, where discussions focused on Ukraine's external financing needs for 2026–2027.
According to Svyrydenko, the key priorities of the 2026 budget are national security, defense, and social stability.
Total expenditures are projected at Hr 4.8 trillion ($116.5 billion), an increase of Hr 415 billion ($10 billion) compared to 2025. Revenues are expected to reach Hr 2.826 trillion ($49 billion), up Hr 446.8 billion ($11 billion) from the previous year.
"The main priority of the budget is security and defense, our social stability," Svyrydenko said.
"The government is directing all of its own revenues and borrowings to Ukrainian forces — financial support for the military and their families, strengthening air defense, and the development and manufacture of our own weapons, including drones," Svyrydenko added.
Ukraine’s draft state budget for 2026 allocates Hr 2.8 trillion ($68.3 billion) to defense spending, an increase of Hr 168.6 billion ($4.1 billion) compared to 2025. Of this amount, at least Hr 44.3 billion ($1.08 billion) is designated for the domestic production of weapons, including Ukrainian-made ammunition, missiles, air defense systems, aviation, and armored vehicles.
The government also plans significant increases in funding for education, healthcare, pensions, and the social sector. Spending on education will reach Hr 265.4 billion ($6.47 billion), which is Hr 66.5 billion ($1.62 billion) more than in 2025.
Support for science will grow to Hr 19.9 billion ($485 million), an increase of Hr 5.4 billion ($132 million) from the previous year. Healthcare spending will total Hr 258 billion ($6.29 billion), up Hr 38 billion ($927 million) from 2025 levels.
Pension payments are projected at Hr 1.027 trillion ($25.05 billion), an increase of Hr 123.4 billion ($3.01 billion), with pension indexation included in the draft. Meanwhile, Hr 467.1 billion ($11.39 billion) will be allocated to the social sector, Hr 45.3 billion (about $1.1 billion) more than the previous year.
