Budget Declaration 2027–2029: Minimum Wage, Dollar Exchange Rate, and What It Means for Business
The government has approved the Budget Declaration for 2027–2029: an increase in the minimum wage, the dollar exchange rate at UAH 51.5, and GDP and inflation forecasts. We break down what this means for entrepreneurs.
The government has approved the budget declaration for 2027–2029 — a document that sets the benchmarks for the state's financial policy for the next three years. For an entrepreneur, this isn't just abstract macroeconomics: the figures laid out in the declaration directly impact the tax burden, personnel costs, and currency risks. We break down the key points and explain what a business owner should do about it.
What a budget declaration is and why you should read it
A budget declaration is a strategic "road map" for public finances three years in advance. It establishes basic macroeconomic indicators: the projected hryvnia exchange rate, the inflation level, GDP growth rates, and departmental spending limits. Based on these guidelines, a detailed budget is then prepared for each specific year.
An important nuance: these are preliminary guidelines, not final figures. Due to the war and the instability of international aid flows, the Ministry of Finance regularly revises these indicators, so they may change before the annual budgets are adopted. Therefore, the declaration should be viewed as a direction of travel, not a guarantee.
“An important nuance: these are preliminary guidelines, not final figures .”
Key assumption: An improved security situation from 2027
The declaration's baseline scenario is built on the assumption that the security situation will significantly improve in 2027. We must stress: this is a planned macroeconomic assumption by the government, on which calculations are based, not a forecast or a guarantee of the war's end. This optimistic scenario is the foundation for all the figures below — and if reality differs, the indicators will be revised.
Under this scenario, the economy transitions from recovery to sustainable growth: GDP grows by 4.5% in 2027, and from 2028, the pace accelerates to over 5%.
Dollar exchange rate: Gradual devaluation through 2029
The declaration projects a smooth increase in the dollar exchange rate throughout the period:
| Year | Average Rate | End of Year Rate |
|---|---|---|
| 2026 | 44.4 UAH/$ | 45.8 UAH/$ |
| 2027 | 47.1 UAH/$ | 48.3 UAH/$ |
| 2028 | 49.1 UAH/$ | 50.1 UAH/$ |
| 2029 | 50.7 UAH/$ | 51.5 UAH/$ |
This means that by the end of 2029, the government is projecting an exchange rate of around 51.5 UAH per dollar.
Inflation: Decreasing after 2027
In 2027, according to the initial forecast, prices will increase by 8.9%. A significant slowdown in inflation is expected from 2028 — to 6.9%.
Minimum wage: Three consecutive years of growth
According to this forecast, the minimum wage will increase annually (for reference, it is currently UAH 8,647):
- 2027: +10.4% — to UAH 9,546
- 2028: +8.7% — to UAH 10,377
- 2029: +7.1% — to UAH 11,114
For context: by current estimates, Ukraine has the lowest minimum wage in Europe — both in nominal terms and in the ratio of the minimum wage to the average wage.
What this means for business
Behind the dry numbers are very specific consequences for a business owner:
A higher minimum wage means higher payroll taxes and payments for individual entrepreneurs (FOPs). The Unified Social Contribution (Yedynyi Sotsialnyi Vnesok, or YeSV), an employer's minimum wage obligations, and a number of other calculations are tied to the minimum wage. An increase in the minimum wage automatically increases your payroll fund and mandatory payments. This should be factored into your financial model now.
A gradual devaluation of the hryvnia creates currency risk in contracts. If you import, export, have foreign currency expenses, or prices tied to the exchange rate, the projected rise of the dollar to ~51.5 UAH affects your margins. It would be wise to review the currency clauses in your contracts and your pricing strategy.
Inflation puts pressure on costs and prices. The projected inflation means a gradual increase in the cost of resources. You should plan to review your prices and costs, rather than "catching up" with inflation after the fact.
These are all preliminary guidelines. You shouldn't make irreversible decisions based solely on these figures: they may change. But using them for 2027 planning is the right move.
Conclusion
The budget declaration is a useful planning tool for a business owner, even if its figures are not yet final. It shows the direction: more expensive labor, a gradually weakening hryvnia, and moderate inflation. A business that incorporates these trends into its financial model and tax calculations in advance will meet 2027 prepared, not caught by surprise.
Want to calculate how these changes will affect your specific business? The experts at KTSPRB can help update your financial model and tax planning for the new benchmarks.
Data source: Budget declaration for 2027–2029 and clarifications from the Ministry of Finance of Ukraine. Figures are as of the date the declaration was adopted and may be revised before the annual budgets are approved.
