#Defense Spending

On October 28, the Verkhovna Rada adopted the 2027 state budget in the first reading: 239 votes, a record 5,236 amendments, and the defense sector at 43.8% of GDP. The government will finalize the document for the second reading.

Russia plans to allocate 17.1 trillion rubles for defense in 2027, which is 27% higher than initial plans, marking a record high since 2022.

The Cabinet of Ministers has prepared a draft state budget for 2027: UAH 4.89 trillion for defense, a minimum wage of UAH 9,546 and a deficit of UAH 1.67 trillion. We break down the key expenditure items.

Prime Minister Koretsky reported that 4.885 trillion hryvnias are allocated for defense in the 2027 budget, however the Armed Forces' needs are significantly higher. Partners are to provide at least 1 trillion hryvnias in external aid.

The Finance Ministry has published the draft 2027 state budget: expenditure will rise to 7.27 trillion hryvnias, defense will receive 43.8% of GDP, and salary increases are promised for teachers and doctors. However, the Finance Minister warned of the risk of delayed social payments without financing from the EU and the IMF.

Ukraine's Cabinet of Ministers submitted the 2027 state budget draft to the Rada on September 15: 4 trillion 885 billion hryvnia (nearly 44% of GDP) has been allocated to defense. At least 1 trillion hryvnia in international assistance is expected.

A report by the Pentagon's Inspector General confirmed a strategic U.S. ammunition shortage following the war with Iran: $22.3 billion in munitions spent, with total losses exceeding $33 billion.

German Chancellor Friedrich Merz stated at the European Arctic Summit in Rovaniemi that Europe is facing 'decisive weeks and months' in the confrontation with Russia, and pledged unwavering support for Ukraine until the end of the war.

Russia's military budget reached a record 10.687 trillion rubles in the first half of 2026 — 43.8% of all federal budget expenditures. Since the start of the war, 57.144 trillion rubles has been spent on the army and the defense industry, an amount comparable to the Central Bank's gold and foreign currency reserves.

Ukraine's Cabinet of Ministers has reallocated UAH 33.6 billion from the security sector reserve for September payments to the military and their families. Prime Minister Koretskyi urged parliament to accelerate the adoption of laws to secure international financial assistance.

Prime Minister Serhiy Korytskyy stated in the Rada that Ukraine has not received 30 billion dollars from partners and is seeking funds for defense. The Cabinet is moving to strict austerity, but sequestration of social programs is not yet planned.

Ukrainian Prime Minister Serhiy Koretsky announced a strict budgetary austerity regime: the government has found 70 billion UAH for defense needs and promised to fulfill all social commitments.

Ukraine's Foreign Minister Andrii Sybiha stated that the country's growing defense and reconstruction spending should be covered by frozen Russian assets, rather than by the funds of European taxpayers.