The Budget Declaration for 2027-2029 provides under one scenario for a gradual reduction of state budget expenditures on security and defense, taking into account the assumption of a significant improvement in the security situation from 2027.
According to government resolution No. 793 of June 17, which approved the Budget Declaration for 2027-2029, it is established that, according to this scenario, the volumes of state budget expenditures for the medium-term period on security and defense are determined for 2027 in the amount of UAH 2.757 trillion; for 2028 – UAH 2.280 trillion; for 2029 – UAH 1.692 trillion, taking into account the assumption of a significant improvement in the security situation from 2027.
"In 2027, the challenges regarding the need to maintain defense capability and military potential to repel the armed aggression of Russia against Ukraine are taken into account. The expenditure indicators provide for the enrollment of the military tax into the special fund of the state budget and its direction to the financial support of servicemen of the Armed Forces," the document reads.
It is noted that the volumes of expenditures on the security and defense sector, according to the proposals of the main managers of budget funds belonging to the security and defense sector, take into account expenditures for the fulfillment of medium-term obligations under state contracts (agreements) for the purchase of weapons, military equipment, arms, and ammunition for 2027 in the amount of UAH 161.8 billion, for 2028 – UAH 14.1 billion, and for 2029 – UAH 5.1 billion.
In addition, to ensure the systemic development of innovative solutions in the security and defense sector in 2027-2029, it is planned to continue the practice of providing grant support to developers of defense technologies (Brave1), who will be selected based on the results of competitions. To finance such support, an increase in the statutory capital of the Innovation Development Fund is envisaged.
"In case of the continuation of the armed aggression of Russia against Ukraine, an increase in its intensity, the security and defense sector will require an increase in expenditures from the state budget, as well as the strengthening of direct military assistance from international partners and the provision of financial assistance for building up the defense-industrial complex (scenario 2)," the document states.
Thus, unlike the first scenario, expenditures on the security and defense sector may be increased by UAH 400-500 billion and in the total volume will tentatively amount to UAH 3.2 trillion, or over 28.2% of GDP.
