Ukraine's budget for 2026, approved by the Kyiv Parliament. Where most of the money will go: 'Priorities are clear'
Flamingo missile, in a secret Fire Point factory in Ukraine, August 14, 2025. PHOTO: Efrem Lukatsky / AP / Profimedia
Ukraine's parliament on Wednesday approved the budget for 2026, planning to allocate almost a third of the country's gross domestic product to defense in the context of the war with Russia, Reuters reports.
Ukraine has been rocked by a political crisis following an investigation into corruption in the energy sector. The vote on the budget was seen by political analysts as a litmus test for Parliament to be able to maintain unity and pass key decisions at a critical stage of the war.
“This is an important signal of Ukraine's resilience and ensuring a stable financial provision for next year's needs,” said President Volodymyr Zelensky.
“The priorities are clear: ensuring our defense, social programs and the ability to rebuild our lives after Russia's attacks,” said the leader from Kiev.
The budget was approved by 257 MPs, despite criticism from opposition MPs who called for higher salaries for soldiers and an increase in other social spending. MPs shouted “Shame” as the vote took place.
Finance Minister Serhii Marchenko said about 27.2 percent of GDP would be allocated to the military, production and arms procurement.
As diplomatic efforts to end the war have so far yielded no tangible results, Ukraine is focusing on increasing domestic arms production to maintain its defense lines against a larger and better-equipped enemy.
Challenge for securing external funding
The budget deficit for next year is set at 18.5 percent of GDP, Marchenko said, adding that the main challenge for Kyiv will be securing external financing to cover the deficit.
Marchenko also said the country will need more than $45 billion in foreign financing in 2026.
Ukraine is hoping to secure a reparations loan from its European partners, which would use frozen Russian assets.
The approval of the budget was also an important step for Ukraine to obtain a new loan program from the International Monetary Fund (IMF).
The government foresees an increase in budget revenues and expenses for next year.
Revenue is expected to reach about 2.92 trillion hryvnias ($68.9 billion) in 2026, an increase of almost 415 billion hryvnias from this year.
Spending is estimated at about 4.84 trillion hryvnias, an increase of 134.5 billion hryvnias compared to this year.
Almost 60 percent of the total spending will be allocated to defense, including soldiers' salaries and weapons purchases, Ukrainian officials said.
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