Ukraine to Spend 44% of GDP on Defense

Ukraine plans to spend nearly 44% of its GDP on security and defense next year under a draft 2027 state budget published by the Ministry of Finance.

Total government spending is set to reach a record 7.27tn hryvnias ($235.5bn), with 4.88tn hryvnias ($158.2bn), or 43.8% of GDP, earmarked for security and defense.

The money will primarily fund soldiers’ salaries and the procurement of weapons and military equipment.

To cover its large budget deficit, Ukraine expects to need $52.6bn in external financing next year from international partners and institutions including the European Union, G7 and World Bank.

Despite the budget’s heavy focus on the war, the government also plans to raise teachers’ salaries to around $880 a month and doctors’ salaries to nearly $1,000, while maintaining substantial social spending.

Tens of billions of hryvnias are earmarked for housing, compensation and rehabilitation programs for internally displaced people and veterans.

The government has also allocated money for rebuilding road infrastructure and supporting businesses. Finance Minister Serhiy Marchenko warned, however, that if international aid is delayed, defense spending will take priority over social programs.

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