State Budget-2026: How Ukraine Allocates Its Resources During War
On December 3, the Verkhovna Rada of Ukraine adopted the Law “On the State Budget for 2026” in the second reading and as a whole. This is the fifth budget approved during the full-scale war. Its priorities are clearly defined defense, security, state resilience, social protection of citizens, support for the economy, development of education and healthcare.
Finance Minister Serhiy Marchenko emphasized: “The 2026 budget is the fifth we are adopting under the conditions of full-scale war. Despite all the challenges, Ukraine remains an effective state we are fighting, working, and fulfilling our obligations to people. This budget ensures the financing of defense, social support, and economic development. All available resources are directed at the main thing protection and the defense capability of Ukraine.”
After processing all the budget conclusions, state budget revenues for 2026 have been increased to UAH 2.9 trillion, with main items VAT on imports, personal income tax, corporate profit tax, excise duties.
Expenditures and loans will amount to UAH 4.8 trillion. The deficit will be covered by government borrowings, most of which are external, expected from the World Bank, EU, IMF, the United Kingdom, and the G7 countries.
The need for external support, according to government calculations, will exceed UAH 2 trillion.
Defense and Security: 60% of All Budget Expenditures
An unprecedented share of funds in the budget is allocated specifically to defense.
Total expenditures on the defense and security sector in 2026 amount to UAH 2.8071 trillion, or 27.2% of GDP. Within the general fund of the budget:
- UAH 1.2729 trillion financial support for servicemen and salaries of security and defense sector employees;
- UAH 709.8 billion procurement of weapons and military equipment;
- UAH 139 billion reserve funds;
- UAH 281.7 billion special fund for defense programs and investments.
Another UAH 30 billion is allocated as government guarantees for enterprises performing critically important defense contracts.
Social Protection System and Support for People During the War
The social block remains key:
- UAH 468.5 billion social protection, transfers to the Pension Fund, pension indexation, support for vulnerable categories, programs for families with children, assistance for people with disabilities;
- UAH 72.6 billion assistance for internally displaced persons: housing, compensation, social services;
- UAH 24.5 billion demographic development support measures: increased birth payments, expanded programs for young families.
Education, Science, Healthcare: Strategic Investments in the Future
- UAH 278.7 billion education: increased salaries for educators, free meals in schools, increased scholarships, investments in school infrastructure;
- UAH 20.1 billion science: support for applied developments, creation of defense research centers, support for young scientists;
- UAH 258.6 billion healthcare: medical guarantees, centralized drug procurement, primary healthcare reform, free medication program, rehabilitation and psychiatric care.
Investments in the Economy, Energy, and Environmental Security
- UAH 51.8 billion support for entrepreneurship, innovation fund, decarbonization programs;
- UAH 47 billion housing policy: compensation for veterans’ housing, for internally displaced persons, energy efficiency programs;
- About UAH 21 billion energy security measures: infrastructure restoration, physical protection of nuclear facilities, support for Chornobyl and environmental safety in exclusion zones.
Local Budgets and Public Investments
- UAH 283.9 billion transfers to local budgets: salaries for teachers, subsidies for meals, social programs, support for regions affected by hostilities;
- UAH 111.5 billion public investments in transport, medicine, education, energy, municipal infrastructure.
Preparation for Budget Execution and Legal Aspects
After the law is adopted, the document is submitted for the President’s signature, after which it comes into force and provides the legal grounds for financing all state programs.
The Ministry of Finance, together with the State Treasury, begins preparation for budget execution: approval of allocations, bringing estimates to managers, opening budget accounts.
The 2026 budget is a document of extraordinary challenges. All available resources are directed to defense, protection, and state resilience. All internal revenues and borrowings are used primarily to ensure financial support for the military, procurement of weapons, and support for economic and social stability. A significant share of expenditures over 60% is for defense and security. The social block, support for education, science, medicine, and investments in the future remain among the key priorities. Every hryvnia in the budget works for the state’s resilience, protection of people, and the development of the basic sectors, without which there will be no future. “All available resources are directed at the main thing protection and the defense capability of Ukraine” these words of the Minister of Finance define the essence of the 2026 budget policy.
Maintaining the balance between the needs of the front and the rear, supporting vulnerable groups, investing in the development of critical industries and public services all this is intended not just to ensure survival, but also a perspective for the country that is fighting for its freedom and future.
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