Ukraine’s 2026 Budget: A Deep Dive into Revenue, Expenses, and What It Means for Ukrainians
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Ukraine’s budget for 2026, approved by the Verkhovna Rada committee in the second reading on December 3, projects income of UAH 2.9 trillion and expenses of UAH 4.9 trillion. this substantial deficit will be covered by borrowings and grants promised by international partners. The Ministry of Finance developed the document anticipating the continuation of the war throughout the next year.
Ukrainians are bracing for another challenging year. While the minimum pension and minimum wage are slated for increases, these adjustments will not fully offset cumulative inflation.
All domestic revenues will be allocated to security and defense, meaning every hryvnia of tax revenue will be directed towards defending the country. Funding for healthcare, education, public sector salaries, and other essential services will rely on loans and grants. Read on to understand the details of Ukraine’s 2026 budget, as outlined by OBOZ.UA.
How the Draft Budget Was Changed for the second Reading
A meeting of the Verkhovna Rada Committee was held on the morning of December 3, approving the revised state budget for 2026 for the second reading. The vote in the parliament session hall took place later that day, with Prime Minister Yulia Sviridenko and Finance Minister Sergei Marchenko in attendance.
261 people’s deputies voted in favor of the estimate in the second reading, with a total of 257 people’s deputies supporting it overall. The votes were distributed among factions as follows:
* “Servant of the People” – 193;
* “Platform for Life and Peace” – 16;
* “Restoration of ukraine” – 11;
* “For the Future” – 11;
* “Trust” – 16;
* “voice” – 1;
* Non-fractional – 9;
* “European solidarity” – 0;
* “Fatherland” – 0.
[Image of Voting results in the 2nd reading]
[Image of Overall voting results]
Budget revenues for the second reading…
ukraine’s 2026 Budget: shelter Funding, Healthcare Investment, and Recurring Pension Issues
The draft Law on the State Budget of Ukraine for 2026 (No. 14000) outlines key allocations for shelter construction and healthcare improvements, while also facing familiar challenges regarding special pension restrictions.
Key Budget Allocations:
* UAH 1 billion – allocated for shelters in kindergartens.
* + UAH 528 million – designated for public investment projects in the healthcare sector, potentially for the reconstruction of the Kharkov Regional Children’s Hospital (pending Strategic Investment Council approval).
Repeating Past Mistakes with Pension Restrictions
Previous attempts by the Ministry of Social Protection to limit special pensions through coefficient-based restrictions have consistently been overturned in court. The core issue lies in the legal requirement that any pension reductions during martial law must be explicitly defined by law, not government decree. The 2025 budget’s reliance on government-defined coefficients faced the same legal challenge.
Courts have ruled that coefficients must be enshrined in law (or at least the budget law) to be legally enforceable. The process of overturning these coefficients typically takes around a month, with rulings often mandating full retroactive payment of benefits lost due to the restrictions.
judge roman Bregey of the Kirovograd District Administrative Court, commenting on Facebook, emphasized that while limiting pensions is permissible, the method of limitation must be legally defined. This position is widely shared among judges nationwide.
While the government argued in 2025 that delays in calculating coefficients necessitated a government resolution, this year, despite having calculated coefficients, the budget again relies on a future government resolution, leaving the door open for further legal challenges and potential reversals.
Ukraine’s 2025 Budget: Prioritizing Defense Amidst Economic Challenges
Ukraine’s recently approved state budget for 2025 prioritizes defense spending while grappling with the ongoing economic impact of the war with Russia. The budget reflects a continued reliance on external financing and modest economic growth projections. Here’s a breakdown of key aspects:
Budget Allocations (in Ukrainian Hryvnia – UAH):
* Ministry of Defense: 1 trillion 923 billion UAH (increased from 1 trillion 568 billion UAH) – This represents the largest portion of the budget, underscoring the country’s focus on military needs.
* Ministry of Social Policy: 465.3 billion UAH (increased from 421.3 billion UAH)
* PFU (Pension Fund of Ukraine): 293.6 billion UAH (increased from 279.2 billion UAH)
* Ministry of Health: 250.2 billion UAH (increased from 216.8 billion UAH)
* Ministry of Education and Science: 184.4 billion UAH (increased from 127.5 billion UAH)
* Ministry of Energy: 11 billion UAH (increased from 7 billion UAH)
* Ministry of Digital Development: 10.1 billion UAH (increased from 4.1 billion UAH)
* Ministry of Veterans: 8.2 billion UAH (increased from 3.3 billion UAH)
* National Security and Defense: 0.9 billion UAH
Defense Spending Focus:
Approximately 45% of the total budget is allocated to monetary support for military personnel. A meaningful 955 billion UAH – roughly one-third of all defense funds – is earmarked for the purchase and production of weapons. https://www.ukrinform.net/rubric-economy/3813411-ukraines-parliament-approves-budget-for-2025-with-defense-spending-priority.html
Social Welfare & Minimum Wage/Pension Increases:
From January 1, 2025, the minimum salary will increase to 8,647 UAH, up from 8,000 UAH. however, the minimum pension will only increase by 234 UAH, rising from 2,361 to 2,595 UAH. Concerns remain that even with these increases, both minimum wage and pension earners will remain below the poverty line. https://www.ukrinform.net/rubric-economy/3813411-ukraines-parliament-approves-budget-for-2025-with-defense-spending-priority.html
A traditional March indexation of pensions is also planned for 2025. Preliminary estimates suggest this indexation could be between 14.6% and 15.4%, potentially being the most significant pension recalculation of the year.
Economic Outlook:
Ukraine’s GDP is projected to grow by 2.7% in 2025,and 2.4% in 2026. Though, the government acknowledges this growth is insufficient to fully offset the economic decline caused by the full-scale war. The budget document emphasizes a focus on reforms aligned with the Ukraine Facility program, cooperation with the International Monetary Fund (IMF), and steps towards european Union membership. https://www.reuters.com/world/europe/ukraine-approves-2025-budget-prioritising-defence-2023-12-18/
Budget Deficit & External Financing:
The state budget deficit is expected to reach 18.4% of GDP in 2026, with 17.2% attributed to the general fund and 1.2% to the