Cabinet submits draft budget-2027 to Rada: what is planned for defense, salaries and pensions

The Cabinet of Ministers has submitted the draft state budget of Ukraine for 2027 to the Verkhovna Rada. The document was registered on September 15 under No. 16000. The main priority remains financing the security and defense sector, but the draft also provides for an increase in the minimum salary and the subsistence minimum, an increase in transfers to the Pension Fund, and the preservation of a number of social programs.

According to the bill's card on the Verkhovna Rada website, the document was initiated by the Cabinet of Ministers, and the parliamentary budget committee has been designated as the lead committee for its consideration.

The government submitted the document on the last day provided by legislation: the draft state budget for the next year must be submitted to the Verkhovna Rada no later than September 15.

Defense remains the main priority

Financing the army and the entire security and defense sector remains the central item of the budget. This is especially important given the significantly increased military needs of Ukraine in 2026.

According to People's Deputy Yaroslav Zheleznyak, directly under the program for maintaining the Armed Forces, the draft for 2027 provides about 1.02 trillion UAH for monetary support. This is about 173.5 billion UAH, or 20.5%, more than the initial budget figure for 2026.

At the same time, the deputy notes that this increase does not automatically mean an automatic increase in payments to military personnel. During 2026, the state already had to significantly increase the initially planned defense expenditures, so when compared with actual needs, the growth will be significantly smaller.

Earlier, the government reported that all available domestic financial resources—tax and customs revenues, excise duties, and domestic borrowing—are directed primarily to defense needs in wartime.

Minimum wage to rise

The draft budget provides for an increase in the minimum wage from January 1, 2027, from the current 8,647 UAH to 9,546 UAH. The increase will be 899 UAH, or about 10.4%.

At the same time, it is planned to increase the main indicators of the subsistence minimum. The general subsistence minimum per person is expected to be 3,559 UAH per month.

For able-bodied persons, it is proposed to set it at 3,691 UAH, and for persons who have lost the ability to work, 2,878 UAH. The latter indicator is used, among other things, as a basic benchmark for the minimum pension.

The official salary of a worker of the first tariff category of the Unified Tariff Schedule is to increase to 3,819 UAH.

More money for the Pension Fund

The transfer of funds from the state budget to the Pension Fund is proposed to be set at about 290 billion UAH. This is 41.5 billion UAH, or about 16.5%, more than this year's figure.

At the same time, a specific percentage of pension indexation is not fixed in the draft budget. It is assumed that indexation will be carried out in the manner and amount to be determined separately by the Cabinet of Ministers.

About 42 billion UAH is provided for housing subsidies and benefits—about the same as in the current year.

What dollar exchange rate is assumed

In the macroeconomic calculations accompanying budget planning, the average annual exchange rate is assumed to be about 47.1 UAH per dollar, and at the end of 2027, about 48.3 UAH per dollar.

This is not an official forecast of the NBU exchange rate or a state-set exchange rate. This indicator is used by the government to calculate revenues and expenditures denominated in foreign currency.

The budget declaration for 2027–2029 also envisages growth of Ukraine's real GDP by 4.5% in 2027. Nominal GDP is forecasted at about 11.53 trillion UAH, the average salary at 35,010 UAH, and inflation at the end of the year at 8.9%.

Ukraine will remain dependent on external financing

One of the key challenges of the 2027 budget is the need to simultaneously finance huge military expenditures and the civilian needs of the state. Earlier, during the preparation of the budget, the government and deputies estimated the total resource needs for the next year at about €175.4 billion, of which about €133 billion was for defense needs.

At the same time, according to People's Deputy Olga Vasilevskaya-Smaglyuk, at the budget consultation stage, about €23.5 billion of the needs did not yet have confirmed sources of financing.

EU assistance is expected to play a significant role. In the budget declaration, the government assumed receipt of about €45 billion in EU support in 2027 through European financial mechanisms.

The declaration itself was drawn up under a baseline scenario that assumed a significant improvement in the security situation starting in 2027. The government simultaneously prepared a so-called resilience scenario in case intensive hostilities continue. In such case, the volume of defense spending and other budget indicators would have to be revised.

What's next for the budget

The document submitted by the Cabinet is still only a draft. It must be considered by the budget committee, after which the bill will go through the first and second readings in the Verkhovna Rada.

During parliamentary review, deputies will be able to make proposals for expenditures and revenues, so individual amounts may change significantly before the budget is finally adopted.

Based on materials from: Verkhovna Rada of Ukraine, Cabinet of Ministers of Ukraine, Yaroslav Zheleznyak, Olga Vasilevskaya-Smaglyuk