Ukraine's finance minister tells Rada UAH 39 billion in spending pushed to year-end, capital outlays blocked
Finance Minister Serhiy Marchenko told the Verkhovna Rada on 12 October that Ukraine's state budget missed about UAH 50 billion in planned revenues in the first nine months of 2026, with UAH 32 billion of that lost in August and September. He said the government has postponed roughly UAH 39 billion in spending to year-end, halted UAH 18 billion in VAT refunds, and that military pay and social programs remain fully financed while capital spending, including roads, is blocked pending EU-required legislation.
Key points
- General-fund budget underperformed by nearly UAH 50 billion in planned revenues over 9 months of 2026; UAH 32 billion of that was lost in August–September.
- Full-year tax shortfall is projected at about UAH 70 billion.
- Cabinet deferred ~UAH 39 billion of payments to the end of 2026 and suspended UAH 18 billion of VAT refunds.
- Single Treasury Account held UAH 46 billion in unexecuted payments as of 12 October, including road repairs, school buses, housing repairs, heating-season prep and backup power.
- Military pay and social programs are financed on time and in full; capital expenditures, including roads, are blocked until the Verkhovna Rada passes laws required by the EU and other partners.
- Ukraine has received EUR 10 billion from the EU year-to-date and expects another EUR 17 billion by year-end.
- Ukraine risks losing EUR 4.48 billion in European aid and has already failed to receive USD 29.5 billion in partner budget support due to delayed reforms; ~USD 27 billion more is needed from partners by year-end.
Why it matters
The finance minister's parliamentary address lays out the scale of Ukraine's 2026 fiscal squeeze: a roughly UAH 50 billion nine-month revenue shortfall, UAH 39 billion of payments pushed to year-end, UAH 18 billion of VAT refunds halted, and UAH 46 billion sitting unexecuted on the Single Treasury Account. With capital spending, including roads, frozen until the Verkhovna Rada passes EU-tied reforms, Kyiv's near-term liquidity depends on roughly USD 27 billion still to come from partners by year-end. Failure to legislate carries concrete costs: USD 29.5 billion in partner budget support has already been withheld, and a further EUR 4.48 billion in European aid is at risk. The 2027 horizon looks no easier, with a EUR 30 billion uncovered budget-support need and EUR 40 billion in uncovered defense needs on top of near-zero growth and 10% inflation.
What happened
During Question Time to the Government in the Verkhovna Rada on 12 October 2026, Finance Minister Serhiy Marchenko reported that Ukraine's general-fund state budget missed nearly UAH 50 billion in planned revenues over the first nine months of the year, UAH 32 billion of it in August and September alone, and that the full-year tax shortfall could reach about UAH 70 billion. He said the Cabinet has postponed roughly UAH 39 billion of expenditures to year-end and suspended UAH 18 billion of VAT refunds; as of 12 October, UAH 46 billion in unexecuted payments sat on the Single Treasury Account, covering items from road repairs and school buses to housing repairs, heating-season preparation and backup power. Marchenko stressed that military pay and all social programs are being financed on time and in full, but that capital expenditures, including road funding, are currently blocked and will only be unblocked once parliament adopts the laws the EU and other partners require. He framed the shortfall as tax under-collection driven by shelling, blocked sea routes and power outages rather than a structural budget 'hole,' and said the government has ramped up domestic borrowing to maintain liquidity, having practically fulfilled its annual domestic borrowing plan. On the external side, he noted Ukraine has received EUR 10 billion from the EU year-to-date and expects another EUR 17 billion by year-end, but that some legislative changes promised to the EU since 2025 remain unadopted. Because of those delays, Ukraine has already failed to receive USD 29.5 billion in partner budget support and risks losing a further EUR 4.48 billion in European aid, with roughly USD 27 billion still needed from partners before year-end.
How Ukrainian sources describe it
Coverage from Ukrainian agencies and media centers on Marchenko's assurances that military pay and social programs are fully and on-time financed while capital spending is paused. The articles emphasize his framing of the gap as tax under-collection caused by external shocks — shelling of businesses, blocked sea routes and power outages — rather than a structural 'hole' in the budget, and highlight that the government has ramped up domestic borrowing to preserve liquidity. The repeated message from his quotes is that the situation is controlled and that the only factor outside Ukraine's control is partners' fulfilment of their own obligations.
Background
Marchenko's 12 October address came against a backdrop of mounting fiscal pressure. On 18 September, President Volodymyr Zelensky described the budget deficit as 'cosmic.' In early September, Prime Minister Serhiy Koretsky announced a strict austerity regime for non-defense expenditures and warned that delays with bills could jeopardize USD 29.5 billion in international aid. On 28 September, the government adopted a decision defining the prioritization of state expenditures. In September, Brussels transferred EUR 3.3 billion for missiles and drones; Ukraine has received EUR 10 billion from the EU year-to-date and expects another EUR 17 billion by year-end. Some of the legal changes Ukraine promised the EU date back to 2025 and have not yet been voted on, and Western media reported that Brussels refused additional support for this year until those reforms are implemented.