12OCT

Koretskyi sends the Rada a war budget

3 min read

10:59UTC

Prime Minister Serhii Koretskyi sent the Rada a 2027 draft giving defence 4.885tn hryvnias, about two-thirds of planned spending.

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ConflictAssessed

Key takeaway

Ukraine plans to spend about two-thirds of its 2027 budget on security and defence.

Ukraine's Prime Minister Serhii Koretskyi sent the 2027 draft state budget to the Verkhovna Rada, Ukraine's parliament, on 15 September. It gives defence 4.885tn hryvnias (the hryvnia is Ukraine's currency), which Koretskyi put at "nearly 44% of GDP", plus at least 1tn hryvnias of expected weapons aid in kind⁠¹. The chair of the Rada budget committee said security and defence would take 66.8% of planned spending, about two-thirds⁠².

"This is the budget of a country at war," Koretskyi said. He added that Ukraine "can only cover part of its expenditures through its own revenues", and that the defence forces' needs for 2027 were "significantly higher", with the exact figures still being finalised⁠³. In August Zelenskyy had warned allies of an unfunded hole in this year's budget.

The civilian lines grow too. The draft raises education to 328.5bn hryvnias and healthcare to 292.5bn, and nearly doubles business support to 96bn, including a war-risk insurance line⁠⁴. With most spending going to the army and own revenue covering only part of the total, the rest of the budget rests on foreign money arriving on time.

Deep Analysis

In plain English

A budget is the government's plan for how much money it will raise in taxes and how it will spend it. Ukraine's government sent its plan for 2027 to parliament, the Verkhovna Rada, on 15 September. Most of the money goes to the army. Prime Minister Serhii Koretskyi said defence spending equals nearly 44% of everything Ukraine's economy produces in a year. Ukraine cannot pay for all of this alone. It expects friendly countries to send weapons directly and to lend or give money for the rest.

Deep Analysis

Root Causes

Ukraine's tax base has shrunk with occupied territory, destroyed industry and millions of citizens abroad, while the army's needs have grown. Koretskyi said the needs for 2027 are "significantly higher" and the figures are still being finalised.

The EU's €90bn loan, which the Rada approved in May , is the main external source for 2026 and 2027. Each tranche carries conditions, so Ukraine's budget calendar depends on Brussels' review calendar.

Kyiv told allies in August that it faced a $27bn gap for the rest of 2026. The 2027 draft repeats that structure: domestic revenue for defence, foreign money for everything else.

What could happen next?

Risk
Delays to the Rada's tax law could hold back EU payments and leave Ukraine short of money early in 2027.
Meaning
A war budget for 2027 shows Kyiv plans for fighting through next year, matching Moscow's own draft.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: Britain's war spending passed half of national income during The Second World War, and from March 1941 Lend-Lease supplied American weapons, food and fuel in kind rather than for cash. A state at war spent its own revenue on its forces and relied on an ally's goods, as Ukraine's 1tn hryvnias of expected in-kind aid now assumes.

Counter-parallel: In 1974 the US Congress cut aid to South Vietnam to $700m for fiscal 1975, well below what Saigon requested. Its forces ran short of fuel and ammunition, and Saigon fell in April 1975, showing what happens when an aid-dependent war budget loses its donor.

Immediate effect: the draft raises education to 328.5bn hryvnias and healthcare to 292.5bn, and nearly doubles business support to 96bn, including a war-risk insurance line. Civilian lines grow despite the defence share, which keeps the deficit high.

Structural effect: a deficit of about 1.6tn hryvnias between revenue and spending must come from partners. The fiscal risk sits less in the defence figure than in the timing of EU and International Monetary Fund (IMF) disbursements.

Consensus view: The chair of the Verkhovna Rada budget committee set out the draft's frame: revenue of 5.648tn hryvnias, up 8.7%, against spending of 7.272tn, with security and defence taking 66.8%. Every hryvnia of tax raised at home goes to the army, and civilian government runs on foreign money.

Counter-view: The European Commission said on 2 September that a revenue-mobilisation law stuck in the Rada is one of twelve conditions for its next payments. Brussels' reading is that Ukraine can raise more at home, and that donors will tie budget support to tax reforms Kyiv's parliament has so far resisted.

Key tension: Whether the Rada passes the tax measures donors demand before the 2027 budget's foreign financing is due, or whether Kyiv opens the year with a hole it cannot fill.

Sources:Cabinet of Ministers of Ukraine·Ukrainian News

Mentions:Serhii Koretskyi →Verkhovna Rada →Ukraine →European Commission →Kyiv →Brussels →US Congress →Vietnam →World War II →International Monetary Fund →United Kingdom →Lend-Lease →

First Reported In

Update #28 · US licenses Russian diesel and turns on Kyiv

Cabinet of Ministers of Ukraine· 12 Oct 2026

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