The 2026-2028 Budget Declaration released by Ukraine’s Ministry of Economy outlines two potential scenarios for the country’s gross domestic product (GDP) growth. The baseline scenario projects an acceleration to a 4.5% growth rate, while an alternative projection, based on the prolongation of the war, anticipates a slowdown to 2.4% in 2026.
The Ministry of Economy has warned that extended military operations will hinder economic growth. This prolonged conflict will also require the government to allocate an additional UAH 775 billion for defense spending, adding significant financial pressure on the state budget.
As the war continues, the economic strain is becoming more evident, with the need for increased public spending on defense affecting overall economic activity and resource allocation. The Ministry’s declaration highlights the delicate balance between national security and economic sustainability, underscoring the challenges faced by the Ukrainian government in managing both priorities amid ongoing hostilities.