Government approves Draft State Budget 2026

The Government of Ukraine has approved the Draft Law on the State Budget for 2026. The document was prepared on time, is balanced, and ensures predictable financing of the state’s priorities.

As in previous years since the start of russia’s full-scale invasion, all domestic financial resources - tax revenues, customs duties, excise taxes, fees, and local borrowings - will be directed by the Government to ensure effective resistance against the aggressor.

In 2026, total expenditures and financing of the State Budget will amount to UAH 4.8 trillion, which is more than UAH 415 billion higher than in 2025 (taking into account amendments).

General fund revenues of the State Budget for 2026 are projected at UAH 2.8 trillion (excluding grants and other international assistance), which is UAH 446.8 billion more than in 2025 with amendments.

Key Budget Priorities for 2026:

Defense and Security – UAH 2,8 trillion, 27.2% of GDP (+UAH 168.6 billion compared to 2025 with amendments), including:

• UAH 2,3 trillion – general fund,
• UAH 220.4 billion – special fund, including UAH 125.3 billion from military personal income tax,
• UAH 200 billion – reserve (UAH 140.0 billion from the general fund, UAH 60.0 billion from the special fund),
• UAH 30 billion – state guarantees.

The focus also remains on financing the domestic defense industry, in particular the production of ammunition, missile weapons, air defense, aviation, and armored vehicles. The draft provides UAH 44.3 billion for this purpose (including UAH 36.7 billion from the allocation of military personal income tax to the State Budget’s special fund).

Social Protection – UAH 467.1 billion (+UAH 45 billion), including:

• UAH 251.3 billion – transfer to the Pension Fund (timely pensions for 10.3 million pensioners, indexation from March 1, 2026).
• UAH 133.0 billion – social payments and benefits for vulnerable groups.
• UAH 24.5 billion – new support measures for Ukrainian families (increase in the one-time payment at childbirth from UAH 10,000 to UAH 50,000; increase in childcare allowance for children under 1 year old from UAH 860 to UAH 7,000; introduction of a new monthly benefit for children aged 1–3 years “eYasla”(eNursery) – UAH 7,000 when parents return to work; one-time support for first graders “School Package” – UAH 5,000).
• UAH 2.1 billion – payments for social support of certain population groups (annual assistance, compensations, critical infrastructure).
• UAH 42.3 billion – housing and utility subsidies (for 2.7 million households).
• UAH 9.9 billion – financing social protection needs of persons with disabilities.
• UAH 2.1 billion – financing of social services.

Education – UAH 265.4 billion (+UAH 66.5 billion), including:

• UAH 183.9 billion – salaries in the education system, including a 50% increase in teachers’ salaries (from 01.01.2026 – by 30%, from 01.09.2026 – an additional 20%).
• UAH 14.4 billion – expansion of the school meals reform for 4.4 million students (from 01.01.2026 – grades 1–4 and grades 5–11 in frontline areas; from 01.09.2026 – all grades 5–11 nationwide).
• UAH 6.6 billion – doubling of academic scholarships for 163.8 thousand students.
• UAH 2.1 billion – procurement of 14.1 million textbooks for grades 4 and 9.
• UAH 15 billion – investment projects (shelters, canteens, school buses, projects under the New Ukrainian School program).

Science – UAH 19.9 billion (+UAH 5.4 billion). This includes funding to support projects by young scientists and leading research institutions, the establishment of defense research centers, and the development of projects commissioned by businesses.

Healthcare – UAH 258 billion (+UAH 38.2 billion), including:

• UAH 191.6 billion – Medical Guarantee Program, including: (UAH 41.0 billion – salary increases for primary care and emergency doctors (up to UAH 35,000). UAH 141.9 billion – treatment of military personnel, rehabilitation, treatment of severe injuries and burns, cardiac surgery, oncology, etc. UAH 8.7 billion – free medicines for citizens with chronic diseases.
• UAH 15.1 billion – centralized procurement of medicines (oncology, orphan diseases, cardiovascular, endoprostheses).
• UAH 10 billion – health screenings for people aged 40 and above.
• UAH 18.6 billion – public investment projects (perinatal centers, maternal and child health, psychiatric care, equipment, rehabilitation centers).

Veterans’ Policy – UAH 17.9 billion (+UAH 6.1 billion):

• UAH 5.7 billion – housing for veterans with disabilities of groups I–II.
• UAH 4.0 billion – veteran support measures (psychological assistance and professional adaptation, development of veteran sports, support projects, one-time cash assistance).
• UAH 8.2 billion – rehabilitation, psychological and social programs, veteran hubs.

Economy and Agrarian Sector

UAH 41.5 billion – for economic support, including:

• UAH 18.0 billion – Business Development Fund (“Affordable Loans 5-7-9%” program – where the state compensates part of the interest rate to banks so that entrepreneurs effectively pay only 5, 7, or 9%, as well as new business support tools).
• UAH 15.8 billion – “єOselya” (eHousing) program for affordable mortgages.
• UAH 4.8 billion – business grants, industrial parks, “investment nannies”.
• UAH 1.9 billion – Decarbonization and Energy Efficiency Transformation Fund.
• UAH 0.6 billion – Energy Efficiency Fund.

UAH 13.1 billion (+UAH 3.5 billion) – to support the agro-industrial complex, including:

• UAH 9.5 billion – financial support for producers (subsidies per hectare, land reclamation, crop insurance).
• UAH 2.6 billion – support for farms.
• UAH 1.0 billion – humanitarian demining of agricultural land.

Regional Support. The total resource amounts to UAH 871.9 billion (+UAH 162.3 billion compared to 2025). Of this, UAH 289.3 billion will go to intergovernmental transfers, support for frontline territories, and a balanced transfer policy to ensure the capacity of local self-government bodies.

The need for external financing in 2026 will amount to almost UAH 2.1 trillion. State borrowings are planned at UAH 2.5 trillion, of which UAH 419.6 billion are domestic and UAH 2.1 trillion are external borrowings. According to forecasts, the State Budget deficit is expected at up to 18.4% of GDP, which is 3.9 percentage points lower than in 2025.

The Government continues to work on attracting international financing from the European Union, G7 countries, the International Monetary Fund, the World Bank, and other partners to fully cover budgetary needs.

The Ministry of Finance of Ukraine has completed the first task of the operational objective Macroeconomic Stability and Effective Public Finance Management under the Government’s Action Program - the draft Law of Ukraine “On the State Budget of Ukraine for 2026” was prepared, approved by the Government of Ukraine, and submitted to the Parliament of Ukraine for consideration.