Ukraine's government prioritises defence and social spending, postpones non-essential projects
Ukraine's Cabinet of Ministers has approved a decision defining priorities for state expenditures amid a difficult fiscal situation, Prime Minister Serhiy Koretsky said on 28 September 2026. Defence, pensions, social payments, and salaries for teachers, doctors and other public-sector workers will be funded first, while new construction, reconstruction, non-critical capital repairs, and beautification projects such as parks, squares, fountains and repaving of cobblestones are being postponed. Koretsky said part of planned international financing has not yet arrived, partly because Ukraine has not met some of its commitments to international partners.
Key points
- On 28 September 2026, Prime Minister Serhiy Koretsky said the situation with Ukraine's state finances remains difficult.
- Part of the planned international financing has not arrived, partly because Ukraine has not fulfilled some of its commitments to international partners.
- The Cabinet approved a decision prioritising defence, pensions, social payments, and salaries for teachers, doctors and other budget-sector workers.
- Financing of new construction, reconstruction, and capital repairs that are not critically important is being postponed.
- Beautification projects such as parks, squares, fountains and repaving of cobblestones are being postponed.
- Koretsky said the postponed projects are not cancelled, only delayed, and called on local self-government bodies to review their own budgets and limit non-priority spending.
- The government submitted to the Verkhovna Rada its sixth wartime budget with planned expenditures of over 8 trillion UAH; own resources of about 3.7 trillion UAH leave a 4.3 trillion UAH gap to be covered by international assistance.
Why it matters
The decision formalises a hierarchy of state spending under tight fiscal conditions, protecting core defence and social obligations while pushing non-essential projects to after the war. It also acknowledges publicly that delays in international financing are linked to Ukraine not yet meeting some of its commitments to partners, a politically sensitive point. Postponing non-critical construction and beautification signals broader budget tightening and is likely to affect projects funded at the local level.
What happened
On 28 September 2026, Prime Minister Serhiy Koretsky said Ukraine's state finances remain difficult and that part of the planned international financing has not yet arrived, partly because Ukraine has not fulfilled some of its commitments to international partners. The Cabinet of Ministers approved a decision defining the prioritisation of state expenditures: defence, pensions, social payments, and salaries for teachers, doctors and other budget-sector workers are to be funded first. Expenditures considered non-priority were postponed, including new construction, reconstruction and capital repairs that are not critically important, as well as beautification projects such as parks, squares, fountains and repaving of cobblestones. Koretsky said these projects are not cancelled but only postponed, and called on local self-government bodies to review their own budgets and limit non-priority spending. He added that the government is working jointly with the Verkhovna Rada to fulfil its obligations to partners and secure the planned financing.
In parallel, the government submitted to the Verkhovna Rada its sixth wartime budget, with planned expenditures of over 8 trillion UAH against own resources of about 3.7 trillion UAH, leaving a 4.3 trillion UAH gap to be covered by international assistance. Of the requested $52.6 billion (about 2.3 trillion UAH) in international funding, partners have so far confirmed only $20 billion (864 billion UAH). Through internal optimisation, the government has identified about $7 billion of the $27 billion it says is needed to fund the Defence Forces and payments to military personnel. The government has also proposed financing new expenditures to support business by raising VAT and excise taxes, a decision that still requires parliamentary approval.
Background
Through internal optimisation of expenditures, the government identified about $7 billion of the $27 billion it says is needed to fund the Defence Forces and payments to military personnel, according to Koretsky.