On June 16, Finance Minister Serhiy Marchenko presented to the coalition council the Budget Declaration for 2027–2029 — a medium-term state finances plan that sets parameters for the next three budgets. The meeting was initiated by Prime Minister Yulia Svyrydenko. Parliamentarian Olha Vasylevska-Smahliuk from the financial committee discussed the document's contents.
Two Scenarios — One Unknown
The declaration is built on two options: the end of active combat operations in 2026 and their continuation. All positive figures released by the government relate to the baseline — optimistic — scenario.
Under the baseline scenario, the budget deficit will shrink from 18.5% of GDP in 2026 to 5.5% in 2029. If the war continues, these trajectories will change, but the government has not publicly disclosed specific figures for the alternative scenario.
What Will Happen to the Hryvnia and Prices
Even in the optimistic scenario, a gradual depreciation of the hryvnia is factored in. The average annual exchange rate will increase from 44.4 UAH/$ in 2026 to 50.7 UAH/$ in 2029, and by the end of 2029, the dollar will cost 51.5 UAH. Inflation in 2027 is projected at 8.9%.
Economic growth, according to the Cabinet's calculations, will accelerate: +2.6% in 2026, +4.5% in 2027, +5.3% in 2028, and +6.7% in 2029. Nominal GDP over this period should increase from 10.1 trillion UAH to nearly 15 trillion UAH.
Minimum Wage Grows — But Slower Than the Dollar
The minimum wage will grow by approximately 29% over three years and reach 11,155 UAH by 2029. Annual increases: +10.4% in 2027, +8.7% in 2028, +7.1% in 2029. The subsistence minimum will be indexed at similar rates.
However, the arithmetic does not favor workers earning minimum wage: if the dollar rises from the current ~42 to 51.5 UAH, then in currency equivalent, the minimum wage will effectively not increase — remaining around $216. The government is separately preparing a wage reform that will require approximately 320 billion UAH from the state budget.
"This is an ambitious but realistic plan. The main thing is to ensure its implementation through effective use of funds and fighting corruption."
— economist Ihor Burakovsky, Institute for Economic Research and Policy Consultation
Debt Sets Records — Even If Everything Goes Well
The most concerning figure in the declaration is government debt. According to Vasylevska-Smahliuk, by the end of 2026 it will reach 106.1% of GDP, and in 2027 — 113%. Budget expenditures will peak in 2027 at 5.05 trillion UAH and only then begin to decline. The need for international financing in 2027 stands at 2.13 trillion UAH.
Separately, Svyrydenko confirmed the continuation of a 10,000 UAH allowance for rear specialists in the armed forces for 2027.
The document frankly acknowledges: if the security situation does not improve, all forecasts regarding deficit reduction and debt stabilization become meaningless. The question is whether the government will fulfill the baseline scenario at least in its fiscal part — reducing the deficit to 1.1% of GDP in 2028 — if international financing in the critical 2027 does not arrive in the amount of over 2 trillion UAH.
