Dollar at 51 hryvnia and wage growth: government presents three-year budget plan
Kyiv • UNN
The government forecasts an exchange rate of 51.5 hryvnia per dollar and wage growth through 2029. The budget declaration envisages an increase in public debt and the deficit.
The government has presented the Budget Declaration for 2027-2029, which envisages, even under an optimistic scenario, a gradual weakening of the hryvnia to 51.5 UAH/$ by the end of 2029, MP from the financial committee Olha Vasylevska-Smagliuk reported on social media on Tuesday, UNN reports.
Details
According to her, the Budget Declaration for the next three years was presented to the coalition council by Finance Minister Serhiy Marchenko in the presence of First Deputy Prime Minister Yuliia Svyrydenko and the entire government. The meeting took place at Svyrydenko's initiative, she indicated.
"The Budget Declaration provides for two scenarios: the end of the war and the continuation of the war," the MP reported.
Vasylevska-Smagliuk also listed the priorities defined by the government in the Budget Declaration for 2027-2029.
"The Ministry of Finance presented the key priorities of the Budget Declaration for 2027-2029. The main emphasis is placed on maintaining social support for citizens, raising social standards, and preparing for new challenges in the process of the country's recovery," the MP indicated.
According to her, the main priorities include:
- maintaining the expenditures provided for in the 2026 budget, in particular the financing of screening programs, student meals, teacher salaries, and demographic development measures;
- raising social standards and guarantees at rates that outpace inflation. In particular, growth is projected for:
- the minimum wage: in 2027 — by 10.4%; in 2028 — by 8.7%; in 2029 — by 7.1%;
- the subsistence level: in 2027 — by 10.9%; in 2028 — by 8.9%; in 2029 — by 7.1%.
- implementation of new state policies to solve key tasks during the formation of budgets for subsequent years, depending on the scenario of the security and economic situation.
The Budget Declaration, she noted, is the main medium-term budget planning document and defines the guidelines for the formation of the state budget for the next three years. According to government officials, the main task remains ensuring the sustainability of public finances, social protection of citizens, and creating conditions for the recovery of Ukraine's economy.
Hryvnia Exchange Rate
According to her data, in the baseline scenario (end of the war), inflation in 2027 will be 8.9%, and the dollar exchange rate at the end of that year will be 48.3 UAH.
Even the government's optimistic scenario includes a gradual weakening of the hryvnia: the average annual exchange rate will increase from 44.4 UAH/$ in 2026 to 50.7 UAH/$ in 2029. By the end of 2029, the dollar will cost 51.5 UAH
Borrowing and the Need for International Financing
"Next year we will also borrow more. The government expects the growth of public debt at the end of 2026 to be at the level of 106.1% of GDP. In 2027 – 113%," Vasylevska-Smagliuk indicated.
"Ukraine's need for international financing in 2027 is 2 trillion 134.5 billion UAH. This should be international aid from the G7, EU, World Bank, UK, IMF, and taking into account the grant from the EU and the loan from the UK, the repayment of which is carried out at the expense of frozen assets of the Russian Federation," she added.
Budget Deficit and Expenditures
According to her, in the event of the end of active hostilities this year, the government plans to return to a more restrained budget policy after peak military spending and predicts a rapid reduction in the budget deficit: 18.5% of GDP in 2026; 17.7% in 2027; 11.1% in 2028; 5.5% in 2029.
She also spoke about plans to reduce costs. "The government expects that after the security situation improves, the need for military spending will decrease. Budget expenditures should reach a peak in 2027 and then begin to decline: 2026 - 4.77 trillion UAH; 2027 - 5.05 trillion UAH; 2028 - 4.87 trillion UAH; 2029 - 4.55 trillion UAH," she indicated.
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GDP Growth
If peace is achieved in 2026, the government, according to her, expects an acceleration of economic growth: 2026 +2.6% of real GDP; 2027 +4.5%; 2028 +5.3%; 2029 +6.7%.
"Nominal GDP during this period should grow from 10.1 trillion UAH in 2026 to almost 15 trillion UAH in 2029," the MP reported.
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Remuneration and Additional Payments to the Military
Vasylevska-Smagliuk also reported that First Deputy Prime Minister Yuliia Svyrydenko indicated that "the additional payment to military salaries - plus 10 thousand UAH for rear specialists should be continued next year as well."
Also, according to her, "First Deputy Prime Minister Yuliia Svyrydenko reported that she had a meeting with President Volodymyr Zelenskyy, who raised the issue of reforming labor remuneration." "A full reform will require about 320 billion UAH. But, as Svyrydenko says, it makes sense to start this discussion so that the first salary reviews take place soon. The government's plans also include an increase in the minimum wage. Over three years, they predict its increase by almost 29%. (The figures themselves were slightly higher)," the MP indicated.