War, pressure from partners or “National Cashback”: why the budget has a billion-dollar deficit
20 June 2025 20:20
The government is looking for an additional UAH 400 billion to finance the budget. The shortfall, according to Cabinet of Ministers Chairman Denys Shmyhal, is due to the fact that all defense spending is covered exclusively from the Ukrainian budget, not by international aid, [Komersant ] reports, citing a statement he made on June 20 during an hour of questions to the government in the Verkhovna Rada.
According to him, the donor money that official Kyiv receives is used mainly for social and economic programs.
“We are working to reduce untargeted spending during the war. Deregulation processes are underway to reduce costs, but unfortunately, this does not affect the increase in sources to cover the military’s expenses, as these are different areas. Our partners do not allow us to spend their money on military needs,” the Prime Minister of Ukraine said.
In response to a question from MP Nina Yuzhanina about covering the UAH 400 billion deficit, Shmyhal reminded of the reduction of 66,000 vacancies and 43,000 civil servants. However, these measures do not affect the financing of the army.
Finance Minister Sergii Marchenko added that the preparation of amendments to the budget is ongoing and provides for further savings.
The budget deficit of UAH 400 billion: how it arose and what politicians and experts say
On Wednesday, May 11, Roksolana Pidlasa , chairwoman of the Verkhovna Rada Committee on Budget, said on Rada TV channel that the increase in the defense budget by 400 billion was a planned step, not a crisis.
According to her, the shortfall was caused by a decrease in aid from international partners. The government has already spent more than UAH 300 billion in advance on the purchase of weapons and ammunition – these funds were taken from the fund for future payments to the military. Pidlasa emphasized that this situation occurs every year and will not affect the regularity of payments. She called it planned.
on May 13, Ukrainian MP Yaroslav Zheleznyak posted on his Telegram channel that as of mid-May 2025, defense spending was underestimated and a UAH 200 billion“hole” had formed in the state budget.
The parliamentarian noted that the government plans to soon amend the 2025 budget to provide an additional UAH 200-250 billion for the needs of the army. The Verkhovna Rada should promptly vote for these changes.
Zheleznyak also warned that “the country is facing another budget cycle: vote for the budget amendments so that the army has money.”
Meanwhile, MP Nina Yuzhanina noted on her Telegram channel that more than 3.4 million Ukrainians received UAH 445 million in cashback for purchasing Ukrainian-made goods in April. The MP considers such spending inappropriate amid active hostilities in Ukraine.
Yuzhanina emphasized that the government’s National Cashback program has not improved the financial situation of Ukrainians or the country’s economy as a whole. However, it is precisely because of such expenditures that a deficit has been created in the defense sector.
Some may believe that against the background of the need to increase state budget expenditures by UAH 400 billion for the army in the short term, UAH 2.4 billion “does not make a difference,” so “what difference does it make” – a billion here, a billion there. At the same time, the military asked to increase funding almost twice as much. “And the cashback program is no help to people, no help to business, no help to the army,” Yuzhanina wrote.
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