Economy

Ukrainian Parliament approves $38 bln defense budget boost for 2026

Ukrainian Parliament approves $38 bln defense budget boost for 2026

The Verkhovna Rada has approved in its second reading and as a whole government bill No. 15224 amending the 2026 state budget to increase spending on the security and defense sector by UAH 1.56 trillion.

According to an Interfax-Ukraine correspondent, 242 lawmakers voted in favor of the measure during Wednesday’s session, exceeding the minimum required 226 votes. Nineteen lawmakers voted against, while 17 abstained.

The increase in security and defense spending by UAH 1.56 trillion is planned to be financed primarily through the European Union’s Ukraine Support Loan (USL).

At the same time, lawmakers rejected an amendment proposed by Servant of the People faction leader David Arakhamia instructing the government to restore the Road Fund in 2027 at a level of 25%, as the proposal received only 222 votes. Parliament also failed to support a proposal from the Budget Committee to reallocate UAH 10 million from the Ministry of Economy, Environment and Agriculture’s fisheries program to management and administration activities in the field of land reclamation and fisheries development.

All other proposals from the industry committee were approved.

In particular, the law was adopted taking into account the previously approved allocation of more than UAH 1.3 billion from the Reserve Fund: UAH 559.1 million for the Ministry of Energy’s central office, UAH 127.5 million for mine liquidation, UAH 46.1 million for the State Energy Supervision Inspectorate, and UAH 599.1 million for the State Agency of Ukraine on Exclusion Zone Management, including UAH 525.1 million for the Shelter facility.

Lawmakers also approved the allocation of UAH 95 million to the National Committee of Sports for the Disabled, UAH 1.4 billion for payments to the Judicial Protection Service, and salary calculations for the National Anti-Corruption Bureau of Ukraine (NABU) based on a subsistence minimum of UAH 3,328 instead of UAH 3,028, without increasing the bureau’s overall expenditures.

"After these amendments, security and defense spending will amount to a record UAH 4.4 trillion. UAH 2.3 trillion will be allocated to the procurement of weapons and military equipment, while more than UAH 1.45 trillion will be directed toward monetary support for our service members," Ukrainian Prime Minister Yulia Svyrydenko explained on Telegram on Wednesday.

As reported, the government’s amendments to the 2026 state budget, adopted in the first reading, provide for an increase in revenues by UAH 2.291 trillion, to UAH 5.196 trillion, and expenditures by UAH 1.640 trillion, to UAH 6.407 trillion, primarily due to the receipt of a EUR 45 billion USL loan from the EU.

According to Finance Minister Serhiy Marchenko, this will reduce the state budget deficit by UAH 651.5 billion, from 18.5% of projected GDP to 12.1% of GDP.

In addition to USL funds, the amendments include UAH 47.7 billion in additional receipts under the Ukraine Facility program and UAH 22.6 billion in personal income tax revenues generated by higher military compensation payments.

Spending on the security and defense sector will increase to UAH 4.367 trillion, including an additional UAH 174.3 billion for military compensation payments, bringing the total to UAH 1.454 trillion, and UAH 1.371 trillion for the procurement and repair of weapons and military equipment, bringing the total to UAH 2.297 trillion. The defense sector reserve will increase by UAH 14.6 billion to UAH 213.6 billion.

The document also provides for a new UAH 40 billion program to implement Comprehensive Regional Resilience Plans and an additional UAH 40 billion for the state budget Reserve Fund.

At the proposal of the Ministry of Defense, future revenues from export duties on military and dual-use goods will be directed toward weapons modernization, the development of the defense-industrial complex, and military compensation payments.

IMPORTANT