Koretskyi Hints at Austerity Measures to Relieve $27B Budget Shortfall

Ukrainian Prime Minister Serhii Koretskyi on Tuesday, Sept. 1, warned of austerity measures to relieve the country’s budget deficit.Koretskyi told Ukraine’s parliament, the Verkhovna Rada, that the government is working on budget cuts to redirect funding to defense, as the country currently faces a $27 billion budget deficit.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official.He reassured that key social payments – including pensions and salaries – would not be affected, according to state media Ukrinform.“The government is introducing a strict regime of savings of budget funds that are not allocated to defense needs,” Koretskyi said.He added that the government has also identified Hr.70 billion (around $1.6 billion) in “savings” which would be “fully” redirected to the army.He attributed the shortfall to rising costs of advanced weapons and extra spending from the defense ministry during the first half of 2026, which he said used funding earmarked for the second half of the year.Koretskyi said the government would also conduct a “detailed audit” on the ministry’s spending to “ensure the most efficient use of budget resources.”Ukraine approved a record budget increase in June, bumping the defense bill up by Hr.1.56 trillion ($34.7 billion) to a record Hr.4.4 trillion (around $98 billion) for 2026.Koretskyi’s comments also come as top Ukrainian officials warn of escalations in Russia’s invasion ahead of winter, with the head of the Presidential Office hinting at plans to mobilize 30,000 troops per month to fend off a rumored Russian offensive backed by 400,000 fresh troops. Other Topics of Interest Xi Says China Ready to Step Up Peace Efforts in Ukraine, Middle East, Afghanistan At the SCO summit, Xi also pushed China’s vision of a multipolar world and deeper cooperation on AI, security and development. Koretskyi asked lawmakers to help approve decisions that could help unlock foreign aid.“Our obligations to them were not fully fulfilled, which creates risks of not receiving the funding we desperately need,” he said.Koretskyi asked lawmakers to adopt 44 decisions by Nov. 1 to help meet the requirements to unlock the funding, which he said include 26 draft laws registered in parliament, 12 of which are already on the agenda, according to Ukrinform.Roksolana Pidlas, the head of the parliament’s budget committee, said in recent weeks that Ukraine is eyeing $12.7 billion in funding by the end of 2026, including funds from the International Monetary Fund (IMF) via the Extended Fund Facility (EFF) program.The comments coincided with a recent IMF visit to review Kyiv’s progress on reforms tied to $8.1 billion in funding, with Kyiv having fallen behind on several prior actions and structural benchmarks due before the end of summer.Ukrainian officials, including President Volodymyr Zelensky and defense minister Yevhen Khmara, have called on Europe to release part of the €90 billion ($104 billion) loan earmarked for 2027 early to relieve fiscal pressure. Kyiv Post is Ukraine’s first and oldest English news organization, reporting since 1995. Its international reach – 97% of readers are outside of Ukraine – make it truly Ukraine’s global voice.