Ukraine’s Draft 2027 State Budget Envisages UAH 1.67 Trillion Deficit, KSE Institute Says
KSE Institute’s analysis of Ukraine’s Draft State Budget 2027 projects revenues of UAH 5.65 trillion and a deficit of UAH 1.67 trillion, or 15% of GDP. Ministry of Defence spending is planned at UAH 3.76 trillion, while $32.6 billion of planned external loans currently has no confirmed financing sources or corresponding partner commitments.
Ukraine's projected 2027 state budget anticipates a substantial UAH 1.67 trillion deficit, according to an analysis by the KSE Institute. The Ministry of Defence's spending is expected to soar to UAH 3.76 trillion, marking a 9.2% increase from the amended 2026 plan. This rise is primarily attributed to the inclusion of the second $45 billion tranche of the Ukraine Support Loan (USL) into the budget.
The government forecasts a 1.3% real GDP growth, 8.6% average inflation, and a US dollar exchange rate of UAH 47.1 per dollar. The budget's success hinges on securing the $91.6 billion in external financing. Government officials acknowledge that the June-approved forecast may need revision pre-second reading due to the impact of recent summer war destruction.
State budget revenues are projected to reach UAH 5.65 trillion, including UAH 2.86 trillion in taxes and UAH 2.49 trillion in international aid. However, UAH 117.3 billion in revenues relies on tax legislation amendments, while UAH 64.9 billion depends on reduced customs duty evasion. The state and state-guaranteed debt could climb to 113.9% of GDP by year-end 2027, with $32.6 billion of the $38.7 billion in external loans still lacking confirmed financing sources.
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