Government tightens austerity regime amid defense budget shortage

The Cabinet of Ministers is tightening budget austerity amid a sharp increase in defense spending. The government has already found about 70 billion hryvnias in reserves from other expenditures and plans to fully direct these funds to the needs of the Defense Forces. At the same time, a detailed audit of the Ministry of Defense's needs and its use of budget resources will be conducted within a month.

This was stated by Prime Minister Sergii Koretskyi during his speech in the Verkhovna Rada.

According to him, the government must verify the justification of new financial requests from the defense department and assess the effectiveness of already incurred expenses.

"We will analyze, study every hryvnia, but the war is changing significantly, the war is becoming significantly more expensive - this is a reality," Koretskyi said.

In parallel, the Cabinet is reviewing other budget expenditures. Koretskyi reported that the government has already found about 70 billion hryvnias in savings, which are planned to be fully reoriented to defense.

$27 billion shortfall for defense

The reason for the stricter approach to budget spending is an additional defense funding deficit, which the government estimates at approximately $27 billion.

Koretskyi named several factors that led to the shortage of funds. First of all, the war itself has become more expensive: Russia is increasing the production and use of missiles and drones, so Ukraine has to increase its own spending on armaments.

Among the areas requiring additional funding, the prime minister named drones, ground robotic systems, long-range artillery, and other means necessary for the Defense Forces.

Another reason is that the Ministry of Defense already funded part of its needs in the first half of the year from resources that were budgeted for the second half. This increased the financial burden on the state at the end of the year.

Ukraine risks falling short of some partner assistance

A separate risk, Koretskyi said, is the delay in implementing part of Ukraine's obligations to international partners.

According to him, in 2026 the country potentially could receive about $30 billion under already agreed international support programs. However, access to these funds depends on Ukraine meeting the conditions it has assumed.

The prime minister stressed that a significant part of the necessary decisions depends on both the Cabinet and the Verkhovna Rada, and therefore he called on deputies to support the bills needed to obtain external funding.

Thus, the government will work simultaneously in three directions: it will reduce and review domestic spending, check the efficiency of the use of defense funds, and try to speed up the attraction of already agreed financing from partners.

Audit and needs of the Ministry of Defense a month away

Koretskyi said that the Cabinet will conduct a detailed audit of the Ministry of Defense within the next month. It should cover both the current needs of the department and new applications for additional funding.

The government plans to separately analyze the use of budget resources and the justification of each major expenditure item. At the same time, the prime minister stressed that the audit itself does not eliminate the need to increase the defense budget, since the costs of waging war are objectively growing.

To cover the deficit, the Cabinet is also appealing to international partners with a request for additional emergency funding. The internal 70 billion hryvnias in savings will be able to cover only part of the new defense needs.

Based on materials from: live broadcast of the Verkhovna Rada plenary session