Ukraine plans to spend 43.8% of its GDP on defense in 2027

Ukraine’s parliament has approved in a first reading a 2027 state budget that sets aside 4.885 trillion hryvnias (about $107.5 billion) for security and defense, equal to 43.8% of the country’s projected gross domestic product.

The Verkhovna Rada passed draft budget No. 16000 on Oct. 28 with 239 votes in favor, 25 against and 26 abstentions, Interfax-Ukraine reported. Defense makes up about 66.8% of planned spending of 7.272 trillion hryvnias (about $160 billion), while revenues are forecast at 5.648 trillion hryvnias (about $124 billion), leaving a deficit of nearly 1.7 trillion hryvnias (about $37 billion).

The defense allocation is nearly 12% higher than this year’s, and 1.73 trillion hryvnias (about $38 billion) of it, or 35.7%, comes from European partners and is earmarked for weapons and military equipment. When the government submitted the draft in September, the finance ministry said spending on weapons, ammunition and equipment would reach 2.298 trillion hryvnias (about $50.6 billion), with much of the rest going to pay for troops, Reuters reported at the time.

The 2027 figure builds on a sharp increase this year. In June, parliament added 1.56 trillion hryvnias to Ukraine’s 2026 defense budget, raising it to a record of about 4.4 trillion hryvnias, with much of the extra money backed by the European Union’s €90 billion Ukraine Support Loan program covering 2026 and 2027. Before that increase, the original 2026 budget had set defense spending at about 2.8 trillion hryvnias, or roughly 27% of GDP.

Finance Minister Serhiy Marchenko told lawmakers in September that the country will need more than $52 billion in international financial aid in 2027, and he named Russian assets frozen by Kyiv’s European allies as a possible source to close the gap. The draft budget projects a deficit equal to about 15% of GDP and public debt above 110% of GDP, UNN reported.

Lawmakers filed more than 5,000 amendments to the draft, and proposals to raise spending totaled 8.8 trillion hryvnias, of which 5.8 trillion hryvnias related to defense, according to the finance ministry. Among the changes parliament kept in the first-reading version was an amendment to raise military pay, Yaroslav Zhelezniak, a member of the Rada’s finance committee, said.

Parliament also adopted its budget conclusions, which list the changes the government must make before the second reading. The Cabinet of Ministers will revise the draft, coordinate some items with international partners and send an updated version back to lawmakers, The Kyiv Independent reported.

The second and final reading is planned for Nov. 23 to 26, Zhelezniak said, and the budget must be adopted by Dec. 1 under Ukrainian law.