Ukraine has reduced its budget deficit from $27 billion (€23.7 billion) to $20 billion (€17.6 billion) through austerity measures, Prime Minister Serhiy Koretsky said on Sunday, though he warned that “the question remains“ how to fill the remaining gap.
Spending cuts will hit areas like road repairs and cultural projects, while military salaries will be protected.
"We are looking for ways to optimize and reallocate available resources to set priorities. The armed forces are the most important priority for all of us," Koretsky said in an interview with the TSN news agency, emphasizing that the salaries of the military will be protected.
“The priority is whether this will lead to survival or not. "This is the only approach to making certain decisions," he said.
Kyiv is in talks with the European Commission, the International Monetary Fund (IMF) and other allies on ways to fill the budget gap that affects the Defense Ministry and risks delaying much-needed arms deliveries.
The recent escalation by Russia has given added urgency to the search for funding.
"Despite joint efforts, we have not yet found a way to cover these costs," Koretsky said.
The prime minister insisted that the $27 billion was not a request for new funds, as it was already part of the annual war costs estimated at $155 billion (136.3 billion euros) that Ukraine announced to its allies in February.
Ukraine has sent the Commission a similar request assessment as Brussels prepared its €90 billion support loan, he said. The loan is split evenly, with €45 billion earmarked for 2026 and another €45 billion – for 2027, with payments already underway.
Ukrainian authorities have floated the idea of early release of part of the loan, but that would leave less money for next year and could worsen the situation.
Commission officials are still trying to determine the exact size of the budget deficit and have urged Ukraine to accelerate reforms to release around €20 billion in financial assistance available this year.
A new meeting of the Donors' Platform for Ukraine will take place in Brussels on Tuesday, with representatives of allied countries and financial institutions.
“We want to bring together international partners ready to discuss how we can overcome the budget deficit,“ a Commission spokesman said.