Ukrainian Finance Ministry: EU's USL will reduce 2026 budget deficit from 18.5% to 12.1% of GDP

MOSCOW. May 12 (Interfax) - Accounting for half of the EU's Ukraine Support Loan (USL) of 90 billion euros in Ukraine's state budget for 2026 will make it possible to reduce the county's deficit to 12.1% of GDP, the Ukrainian Finance Ministry said regarding changes to the main financial document, which the government approved last Friday for further submission to the Verkhovna Rada.

"Thanks to the significant amount of external support in the form of grants, the state budget deficit will decrease by UAH 651.5 billion, from 18.5% to 12.1% of GDP (a reduction of 6.4%)," Ukrainian media reported, citing a statement from the Finance Ministry.

Of the indicated 45 billion euros from the USL this year, 13.2 billion euros is budget support for social and humanitarian needs and 31.8 billion euros is support for defense capability and security, the ministry said.

According to the approved changes, state budget revenues for 2026 will increase by UAH 2.291 trillion to UAH 5.196 trillion. In addition to UAH 2.221 billion of USL (45 billion euros at the average annual exchange rate), the budget also includes UAH 47.7 billion in additional revenues under the implementation of Ukraine's Plan under the Ukraine Facility program and another UAH 22.6 billion in personal income tax due to an increase in the amount of monetary support for military personnel.

"In addition, the main administrators of state budget funds submitted proposals to reduce expenditures by UAH 276.3 million in accordance with the government's protocol instruction," the ministry said.

As for expenditures, the largest increase will be in the security and defense sector - by UAH 1.560 trillion to UAH 4.367 trillion.

The reserve for the security and defense sector will also increase by UAH 14.6 billion, reaching UAH 213.6 billion.

According to the head of the parliamentary budget committee, Roksolana Pidlasa, the vote in the Verkhovna Rada is expected on May 25.

Ukraine's 2026 state budget was adopted with revenues (excluding grants) of UAH 2.90 trillion and expenditures of UAH 4.77 trillion, including UAH 2.61 trillion and UAH 4.38 trillion for the general fund, respectively.

According to the Finance Ministry, in January-April 2026, UAH 1.04 trillion was received into the general fund, while its expenditures amounted to UAH 1.35 trillion. This is 21.5% and 13.9% higher than in the same period of 2025, respectively.