Budget Declaration for 2027–2029: Course towards stability and recovery

The Cabinet of Ministers of Ukraine has approved the Budget Declaration for 2027–2029, a medium-term fiscal document that defines the key principles of the country’s budget policy for the next three years. The Government’s prudent and consistent fiscal policy is aimed at ensuring gradual fiscal consolidation and laying the foundations for macroeconomic stability and Ukraine’s sustainable economic recovery.

Two Budget Planning Scenarios

The Declaration was developed on the basis of a baseline scenario, which assumes a significant improvement in the security situation from 2027. At the same time, it includes assumptions under a resilience scenario that takes into account the possibility of the active phase of hostilities continuing for a longer period.

Baseline Scenario

The baseline scenario envisages the economy transitioning from recovery to sustainable growth, supported by the expansion of production capacity, the normalisation of infrastructure operations and the gradual recovery of the labour market. This scenario forms the basis for the indicators set out in the Budget Declaration.

Resilience Scenario

The resilience scenario assumes that hostilities continue for a longer period. Under this scenario, security and defence expenditure would need to be revised.

Key Macroeconomic Indicators: Baseline Scenario

The projected macroeconomic indicators point to the consistent strengthening of Ukraine’s economy in 2027–2029:

• real GDP growth is expected to accelerate from 4.5% in 2027 to 5.3% in 2028 and 6.7% in 2029;
• nominal GDP is projected to increase from UAH 11.53 trillion in 2027 to UAH 14.95 trillion in 2029;
• the average monthly wage is expected to rise from UAH 35,010 in 2027 to UAH 44,083 in 2029;
• inflation is projected to gradually decline from 8.9% in December 2027 to 5.1% in December 2029;
• exports of goods and services are expected to increase from USD 60.4 billion in 2027 to USD 77.5 billion in 2029.

International Support and EU Integration

The indicators set out in the Budget Declaration have been coordinated with Ukraine’s international partners and are consistent with the country’s commitments, including those under:

• the International Monetary Fund’s Extended Fund Facility programme;
• the new EU instrument, the Ukraine Support Loan for 2026–2027, amounting to EUR 90 billion under EU Regulation 2026/467;
• the EU’s Ukraine Facility for 2024–2027.
• In 2027, Ukraine expects to receive EUR 45 billion in EU support under the relevant instrument.

Fiscal Consolidation: A Declining Budget Deficit

One of the key priorities of the Budget Declaration is the gradual reduction of the state budget deficit, from 18.5% of GDP in 2026 to 5.5% of GDP in 2029. This confirms the Government’s commitment to restoring debt sustainability and strengthening the confidence of international partners.

Budget Revenues: A Growing Trend

Under the baseline scenario, the revenue framework is based on a stable and equitable fiscal system. Provided that the security situation improves significantly from 2027, state budget revenues, including those generated through a package of additional measures, are expected to increase as follows:

• UAH 3.01 trillion in 2027, UAH 107.1 billion above the 2026 plan;
• UAH 3.42 trillion in 2028, UAH 409.4 billion above the 2027 level;
• UAH 3.73 trillion in 2029, UAH 304.5 billion above the 2028 level.

Higher Social Standards

Despite the challenging conditions caused by the war, the Government will continue to strengthen social guarantees:

• the minimum wage will be increased in 2027 at a rate exceeding inflation;
• the subsistence minimum will be increased by the inflation rate plus two percentage points in each of the three years from 2027 to 2029;
• support for veterans and people affected by Russia’s armed aggression will continue;
• conditions will be created to facilitate the return of displaced Ukrainians and restore the country’s human capital.

Public Investment Reform and State Debt Management

The Budget Declaration provides for the continuation of the public investment management reform, including the digitalisation of the management cycle, the introduction of unified transparency standards and improvements in the efficiency of resource allocation.

More effective management of state debt, the majority of which consists of long-term concessional loans, will contribute to the gradual restoration of debt sustainability.

The Budget Declaration for 2027–2029 establishes a predictable and consistent medium-term fiscal policy for Ukraine and provides a foundation for macroeconomic stability.

The next step will be for the Government to submit the Budget Declaration for 2027-2029 to the Verkhovna Rada of Ukraine for consideration.