---
title: "Cabinet Introduces Strict Austerity: Koretsky Finds 70 Billion UAH for Defense and Promises to Honor Social Commitments"
description: "Ukrainian Prime Minister Serhiy Koretsky announced a strict budgetary austerity regime: the government has found 70 billion UAH for defense needs and promised to fulfill all social commitments."
date: 2026-09-01T10:16:05.000Z
lang: en
url: https://xab.info/en/posts/cabinet-strict-austerity-budget-defense-koretsky
tags: [ukraine-budget, defense-spending, sergiy-korytskyy, fiscal-policy, ukraine-parliament]
publisher: "XAB.info"
---

# Cabinet Introduces Strict Austerity: Koretsky Finds 70 Billion UAH for Defense and Promises to Honor Social Commitments

![Cabinet minister speaks in parliament on strict budget savings and 70 billion UAH for defense](https://xab.info/media/2026/09/01/kabmin-zhestkaya-ekonomiya-byudzheta-na-oboronu/kabmin-zhestkaya-ekonomiya-byudzheta-na-oboronu-1.webp)

## 🎯 Key Points

- The Cabinet is introducing a strict budgetary austerity regime for spending not tied to defense.
- According to Koretsky, 70 billion UAH in savings has been found for defense needs.
- The government promises to fulfill all social commitments on pensions and salaries.
- A detailed audit of the Ministry of Defense's needs within a month was named the second task.
- Economist Danylyshyn estimated the deficit without external grants for the first half of the year at nearly 877 billion UAH.

Ukrainian Prime Minister Serhiy Koretsky, during his address to the Verkhovna Rada, announced that the government is shifting to a strict budgetary austerity regime. According to him, the goal of these measures is to free up the maximum resources for defense needs amid the ongoing war. The Cabinet, as stated by the head of government, has already completed the first stage of identifying reserves and, in his assessment, has found 70 billion hryvnia in savings, which will be directed "in full" to defense.

### Strict Austerity Without Harm to Social Commitments

Koretsky emphasized that the austerity regime applies to all budgetary items not earmarked for defense needs. At the same time, the prime minister assured that the state will fulfill all social obligations to citizens: "As for pensions and salaries — there will be no problems." Thus, the government is trying to reconcile two contradictory requirements — cutting spending while keeping the social block intact, which in effect means reallocation rather than an overall reduction in the budget burden.

### Ministry of Defense Audit and the "Every Hryvnia" Principle for 2027

Koretsky named a detailed audit of the Ministry of Defense's needs as the government's second task. According to him, within a month the Cabinet will analyze all issues related to the use of defense budgetary resources to ensure their maximum efficiency. The prime minister also stated that the principle of maximum economy of every budgetary hryvnia will be built into the preparation of the state budget for 2027, and he called on lawmakers to actively join this process.

### Budget Dependence on External Grants

The context of the announced measures is a chronic state budget deficit, which is largely covered by foreign transfers. Economist Bohdan Danylyshyn had previously warned that budgetary balance is held up by external grants rather than own revenues: by his calculations, without these transfers the deficit for the first half of the year reached nearly 877 billion hryvnia. In parallel, the head of the Verkhovna Rada's tax committee, Danylo Hettmanets, proposed reviewing inefficient spending, in particular canceling the "National Cashback" program, which he called a populist mistake, and directing the freed-up funds toward preferential business lending.

### Contradictory Data

There is a notable inconsistency in the assessments of the scale of the problem. On the one hand, Koretsky claims 70 billion hryvnia in savings found and no problems with pensions and salaries, thus conveying an optimistic scenario of managed reallocation. On the other hand, economist Danylyshyn's data point to a deficit of around 877 billion hryvnia for the first half of the year without external grants, which is an order of magnitude larger than the announced reserves. Moreover, the 70 billion hryvnia figure is a government claim and has not been confirmed by an independent audit, whereas the deficit estimate is based on a third-party expert's calculations. Until the promised one-month audit of the Ministry of Defense is completed and the 2027 budget is prepared, the actual size of available reserves remains a matter of debate.

## 🔍 Fact-Check Verification

- [Cabinet shifts to strict austerity amid budget deficit](https://www.rbc.ua/ukr/news/kabmin-perehodit-zhorstku-ekonomiyu-cherez-1788257461.html) - Подтверждает заявление Корецкого о жесткой экономии и 70 млрд грн на оборону, сохранение соцобязательств.
- [Cabinet announces strict spending austerity regime](https://korrespondent.net/business/economics/4907973-kabmyn-obiavyl-zhestkyi-rezhym-ekonomyy-sredstv) - Совпадает с версией о введении режима экономии бюджетных средств.
- [Cabinet shifts to strict austerity: Koretsky explains the situation](https://politics.comments.ua/news/cabinet/kabmin-perehodit-na-zhestkuyu-ekonomiyu-koreckiy-razyasnil-situaciyu-815041.html) - Отражает разъяснения премьера по экономии и аудиту Минобороны.
- [Government moves to strict austerity regime amid budget deficit](https://ukranews.com/news/1172306-pravitelstvo-perehodit-na-rezhim-zhestkoj-ekonomii-iz-za-defitsita-byudzheta) - Подтверждает причину — дефицит бюджета; цифра 70 млрд грн не независимо верифицирована.

## ❓ FAQ

### Q: How much funding, according to the government, has been found for defense needs?
**A:** Prime Minister Serhiy Koretsky stated that, as a result of the reserve search, 70 billion hryvnia in savings has been found, which will be directed in full to defense. This figure is a Cabinet claim and has not been confirmed by an independent audit.

### Q: Will pensions and salaries be cut due to the austerity regime?
**A:** Koretsky assured that the state will fulfill all social obligations and that "as for pensions and salaries, there will be no problems." The austerity regime, according to him, concerns funds not earmarked for defense needs.

### Q: What is the government's second task, according to the prime minister?
**A:** Koretsky named a detailed audit of the Ministry of Defense's needs as the second task; within a month the government promises to analyze the use of defense budgetary resources.

### Q: How dependent is the budget on external grants?
**A:** Economist Bohdan Danylyshyn estimated the budget deficit for the first half of the year without foreign transfers at nearly 877 billion hryvnia, pointing to a strong dependence on external support.