The Cabinet of Ministers has implemented maximum cost-cutting measures by postponing non-essential expenditure and is accelerating efforts to meet the conditions for international funding. Prime Minister Serhiy Koretskyi announced on 30 September that, following the adoption of four decisions, the government had completed 17 of the 42 necessary steps. The Cabinet plans to complete the remainder by 15 October.
Briefly about the main points
- Non-essential expenditure is being put on hold due to the difficult financial situation.
- Priority will be given to defence, pensions, social benefits and public sector salaries.
- The government has brought forward its own timetable and moved the deadline from 1 November.
- Part of the funding from partners also depends on the final votes in the Rada.
- Payment prioritisation will be applied in the event of a forecast shortage of resources.
Which expenditure does the state prioritise, and which can it postpone?
Cabinet of Ministers has officially prioritised public expenditure due to the difficult financial situation and delays in part of the planned external funding. Defence, pensions, social benefits, public sector wages and the servicing of central and local government debt remain top priorities.
New construction projects, non-critical refurbishments, major repairs and individual urban improvement projects will be postponed. The main budget administrators may not enter into commitments in excess of the amount of authorised appropriations.
According to the Ministry of Finance, this does not mean the unconditional suspension of all non-priority payments until the end of the year. The Treasury will forecast cash flow on a monthly basis, and priority will be applied if the forecast indicates a shortfall in resources for that month’s expenditure.
Why has the government shortened the timeframe for fulfilling its commitments?
Commitments to international partners consist of two parts: government decisions and laws that are to be enacted Verkhovna Rada. Initially, the Cabinet of Ministers had planned to complete all its own measures by 1 November, but due to the deterioration in public finances, it brought the deadline forward to mid-October.
According to Koretsky’s, up to $29.5 billion of international funding earmarked for 2026 may not be received in full or may be delayed if the agreed conditions are not met by the set deadlines. The Prime Minister emphasised that ministries must speed up the preparation of every planned decision within the next two weeks.
Parliamentary votes remain the second condition for the release of funds
The Government has informed the Verkhovna Rada of the deadlines by which legislation relating to funding must be voted on and signed into law. MPs supported some of these initiatives at first reading during the last plenary week.
The first reading does not mark the fulfilment of the partners’ conditions: the draft laws must undergo further parliamentary procedures, be adopted in their final form and, where required by procedure, be signed by the President. Alongside government decisions, it is this stage that will determine whether Ukraine’s legislative obligations are met.
