The baseline scenario for the end of the war, on which the government’s 2027-2029 Budget Declaration is based, assumes inflation of 8.9% in 2027 and a depreciation of the hryvnia to UAH 48.30/$1, Servant of the People lawmaker Olha Vasylevska-Smahliuk said during a presentation of the declaration to members of parliament on Tuesday.
"Even under the government’s optimistic scenario, a gradual weakening of the hryvnia is projected: the average annual exchange rate will rise from UAH 44.40/$1 in 2026 to UAH 50.70/$1 in 2029. By the end of 2029, the dollar will cost UAH 51.50," she wrote on her Telegram channel.
Vasylevska-Smahliuk clarified that the Budget Declaration includes two scenarios: an end to the war and a continuation of the war.
"If active hostilities end this year, the government plans to return to a more restrained fiscal policy following peak wartime expenditures and forecasts a rapid reduction in the budget deficit: 18.5% of GDP in 2026, 17.7% in 2027, 1.1% in 2028, and 5.5% in 2029," the lawmaker noted.
According to her, if peace is achieved in 2026, the government expects economic growth to accelerate to 2.6% this year, 4.5% next year, 5.3% in 2028, and 6.7% in 2029.
Nominal GDP over that period is expected to increase from UAH 10.1 trillion in 2026 to nearly UAH 15 trillion in 2029, Vasylevska-Smahliuk said.
"We will also borrow more next year. The government expects public debt to reach 106.1% of GDP by the end of 2026. In 2027, it is projected at 113%," she added.
According to the lawmaker, Ukraine’s need for international financing in 2027 amounts to UAH 2.1345 trillion. This is expected to be covered through international assistance from the G7, the European Union, the World Bank, the United Kingdom, and the International Monetary Fund (IMF), as well as through an EU grant and a UK loan to be repaid using proceeds from frozen Russian assets.
