Budget Gap in 2027: How Much Ukraine Is Short Of and Where They Will Look for the Money

In 2027, Ukraine will need $52.6 billion in international financial support, the state budget deficit is planned at 15% of GDP, and public debt may exceed 110% of GDP. At the same time, as recently as early September, the Ministry of Finance preliminarily estimated the uncovered need for external financing next year at $32.6 billion and called the current budget situation the most difficult since 2022.

UNN examined what was included in the draft State Budget for 2027, why Ukraine’s need for funds is growing, and how dependent the state will be on financing from international partners.

Expenditures are growing twice as fast as revenues

On September 15, the Cabinet of Ministers approved and submitted to the Verkhovna Rada the draft State Budget for 2027. The document was registered in parliament under No. 16000, and lawmakers are currently reviewing it in the relevant committees. This means that the indicators set out in the state budget may still change as the document passes through all the necessary stages in the Verkhovna Rada.

Returning to the figures, the draft budget for next year provides for UAH 5.648 trillion in revenues. This is UAH 452.1 billion, or 8.7%, more than the 2026 plan, taking into account the amendments made to it. Expenditures, meanwhile, are expected to reach UAH 7.272 trillion. They are increasing by UAH 864.9 billion, or 13.5%, all at once. In other words, the expenditure side of the budget is growing significantly faster than revenues.

According to the Ministry of Finance’s calculations, the state budget deficit will amount to approximately 15% of projected GDP. For comparison, the expected figure for 2026 is approximately 12% of GDP. Total deficit financing is planned at approximately UAH 1.67 trillion, with external borrowing expected to play the key role.

At the same time, the ceiling on public debt at the end of 2027 may reach approximately UAH 12.31 trillion, or 110.4% of projected GDP. In terms of the debt structure, about 84% may consist of external liabilities and only 16% of domestic liabilities.

Ukraine needs $52.6 billion from abroad

One of the most telling figures in the draft budget is the need for international financial support. For 2027, the Ministry of Finance estimated it at $52.6 billion. The money is planned to come from the European Union, the G7 countries under the ERA mechanism, the International Monetary Fund, the World Bank, the United Kingdom, and other partners.

The problem is that the financing need and the funds already guaranteed to Ukraine are not the same thing.

On September 4, Finance Minister Serhii Marchenko stated that Ukraine’s preliminary uncovered need for external financing in 2027 amounted to $32.6 billion. According to him, Ukraine’s basic annual need for external financing remains at approximately $50 billion. Marchenko called the budget situation the most difficult since 2022 and warned that without the necessary assistance from allies, the state might have to cut some non-military expenditures.

After the draft budget was finalized, the estimate of the overall need increased to $52.6 billion.

What the IMF says

The International Monetary Fund’s estimates differ somewhat from the government’s new budget calculations. During the first review of the new EFF program, the IMF estimated Ukraine’s financing gap for 2027 at $43.4 billion under the baseline scenario. At the time, the Fund assumed that about $40.7 billion could come from official creditors and donors, another approximately $1.8 billion directly from the IMF, while about $0.9 billion would result from debt-service relief.

However, these figures should not be mechanically compared with the $52.6 billion envisaged in the new draft budget. The IMF’s calculations were based on information available as of May 2026 and concerned the broader financial balance under the Fund’s program. Since then, Ukraine’s needs, primarily defense-related, have continued to grow.

This is already clearly evident from the current year: according to the parliamentary budget committee, one day of war in 2026 costs Ukraine approximately $190 million, whereas in 2024 the figure was about $140 million.

Ukraine needs nearly UAH 4.9 trillion for the war

The security and defense sector remains the main item in the draft 2027 State Budget. The Cabinet of Ministers proposes allocating UAH 4.885 trillion to it, or 43.8% of projected GDP. This is UAH 517.9 billion more than was included in the 2026 budget after amendments were made.

Of this amount:

• UAH 1.792 trillion - for wages and related charges;
• UAH 2.299 trillion - for weapons and military equipment;
• UAH 499.9 billion - for other defense expenditures;
• UAH 264.9 billion - as a reserve;
• UAH 30 billion - in state guarantees for the purchase of weapons and military equipment.

In practice, defense absorbs the bulk of the state's domestic financial resources. Civilian expenditures - social programs, education, healthcare, support for internally displaced persons, reconstruction, and some economic programs - depend to a considerable extent on external funds.

That is why disruptions in international financing for Ukraine point to the critical need to determine which nonmilitary expenditures should be postponed, cut, or provided with additional domestic sources of funding.

The government does not expect an economic breakthrough

The draft budget for 2027 was prepared based on a conservative scenario that assumes the continuation of high security risks. As economic analysts explain, the Cabinet of Ministers used a scenario under which real GDP will grow by only 1.3% in 2027. Inflation is forecast at approximately 8%. At the same time, in the more optimistic scenario presented in June, which envisaged a significant improvement in the security situation, the Cabinet of Ministers expected the economy to grow by 4.5%. These facts indicate that the authorities are no longer preparing the main financial document based on the assumption of a rapid end to the war and a sharp economic recovery.

Why the budget situation is being called the most difficult since 2022

A large deficit in Ukraine's wartime budget is not, in itself, a new phenomenon. Since the beginning of the full-scale invasion, the state has spent significantly more each year than it has been able to collect domestically, covering the difference through international aid and borrowing. However, several problems are converging simultaneously in 2027.

Military expenditures continue to grow, while the economy, according to the government's forecast, is barely accelerating. The deficit is again rising to 15% of GDP, debt exceeds the annual GDP, and more than $50 billion in external support is needed to fulfill all the commitments included in the budget.

This is compounded by uncertainty over what portion of this money will be guaranteed by partners in advance and when exactly it will arrive.

Therefore, the main risk of the 2027 budget is not that the state will suddenly run out of money on January 1. What is critical is that the ability to execute the entire planned volume of expenditures increasingly depends on decisions by partners, international programs, and Ukraine's fulfillment of the conditions to which individual tranches are tied.

At the same time, draft budget No. 16000 is only beginning to undergo all the necessary procedures in the Verkhovna Rada of Ukraine. During the first and second readings, its revenues, expenditures, and individual sources of financing may still be revised. The final configuration of 2027 financing will become clear after agreements with key international partners and the parliament's adoption of the final version of the state budget.

We remind you

The other day, President of Ukraine Volodymyr Zelenskyy called on lawmakers to vote in favor of seven bills to finance the budget deficit and emphasized defense needs.