Ukraine's PM announces budget savings regime, 70 billion hryvnias redirected to defense
Prime Minister Serhiy Koretsky told the Verkhovna Rada on September 1 that the government has introduced a strict budget-savings regime for non-defense spending and will redirect 70 billion hryvnias to the Defense Forces. He said the defense budget faces a $27 billion deficit, which Ukraine is asking partners to cover through emergency financing, and announced a one-month audit of the Ministry of Defense.
Key points
- PM Serhiy Koretsky announced the savings regime during a speech in the Verkhovna Rada on September 1, 2026.
- 70 billion hryvnias will be redirected entirely to the needs of the Defense Forces.
- The current defense budget has a deficit of $27 billion, which Ukraine is asking partners to cover through emergency financing.
- A one-month audit of the Ministry of Defense will be conducted to ensure maximally efficient use of budget funds.
- All social obligations, including pension and salary payments, will continue to be fulfilled as normal.
- Koretsky called on MPs to help draft the 2027 state budget based on the principle of "maximum savings of every budget hryvnia."
- Koretsky conditioned additional partner financing on Ukraine fulfilling its previous obligations to partners.
Why it matters
Koretsky's announcement signals a tightening of non-defense public spending in wartime Ukraine, underscoring the scale of the $27 billion defense budget shortfall and Kyiv's reliance on partner emergency financing. The one-month Ministry of Defense audit frames the package as an accountability measure, and the call to base the 2027 budget on "maximum savings" sets the fiscal tone for the next budget cycle.
What happened
On September 1, Prime Minister Serhiy Koretsky addressed the Verkhovna Rada and outlined a strict budget-savings regime for funds not allocated to defense needs. He said the government has identified 70 billion hryvnias that will be redirected entirely to the Defense Forces. The prime minister stated that all social obligations, including pensions and salaries, will continue to be met as normal. He disclosed that the current defense budget has a deficit of $27 billion and that Ukraine is asking partners to cover this gap through emergency financing. Koretsky announced that a one-month audit of the Ministry of Defense will be carried out to ensure the maximally efficient use of budget funds, and he called on MPs to help draft the 2027 state budget around the principle of "maximum savings of every budget hryvnia." Additional partner financing, he said, is conditional on Ukraine fulfilling its previous obligations to partners.
How Ukrainian sources describe it
Both Ukrainian-language sources — Babel and hromadske — center their coverage on Koretsky's parliamentary announcement, pairing the savings regime, the 70 billion hryvnia reallocation, and the Ministry of Defense audit into a single accountability narrative. They emphasize the government's assurance that pensions and salaries will continue to be paid, and frame the deficit as a consequence of rising war costs rather than domestic policy choices. The savings regime and audit are presented as measures targeting how the Defense Ministry uses its funds.
Background
Ukraine's defense budget carries a stated deficit of $27 billion, which the government is seeking to close with partner emergency financing. Koretsky attributed the growing shortfall to the increasing technological cost of war and to Ukraine's prior unmet obligations to partners. He also pointed to the Ministry of Defense having financed first-half 2026 expenditures using second-half funds as a contributing problem. Defense Minister Yevheniy Khmara had previously cited the same $27 billion figure.