Nearly All of Ukraine’s Annual Reserve Fund Spent in Just Three Months: Budget Crisis Deepens.

Ukraine’s State Budget Performance in Q1 2026: Key Findings

According to Espreso.tv: Ukraine’s Accounting Chamber has released its analysis of the state budget execution for the first quarter of 2026, revealing alarmingly high spending from the reserve fund and a sharp rise in national debt. During that period, the government used 96.3% of the entire annual reserve fund. Notably, 38% of those funds were allocated to purposes outside the fund’s original mandate. At the same time, a separate 3.2 billion hryvnias earmarked for dealing with the aftermath of armed aggression remained completely untouched.

Ongoing Issues and Pressing Challenges

One of the most urgent problems involves delayed compensation: 23.8 billion hryvnias for destroyed housing have yet to be paid out. On the revenue side, the state collected 1.02 trillion hryvnias—10% more than in the same period last year. However, real GDP contracted by 0.5%, marking the first decline since the second quarter of 2023 and signaling economic strain. Corporate tax arrears climbed to 242.9 billion hryvnias, while total state debt reached 9.23 trillion hryvnias.

State borrowing fell 273 billion hryvnias short of the planned target. As of June 10, total government expenditures stood at 1.15 trillion hryvnias, of which 317.8 billion hryvnias went toward military salaries and allowances.

Olha Pishchanska remarked: 'The first-quarter analysis allows us to identify risks in future budget decisions before they cause tangible harm to the state and its citizens. Some of these challenges have already taken shape, which is why we urge the government to act more swiftly and systematically.'

Petro Poroshenko commented: 'The authorities’ plan to pull 40 billion hryvnias from the Defense Ministry’s budget is outrageous.'

These budget execution figures highlight the severe financial difficulties Ukraine is grappling with, especially amid ongoing war and economic uncertainty. The fact that reserve fund spending has far exceeded planned levels points to possible shortcomings in resource management, raising further concerns about the country’s future economic stability. The failure to disburse housing compensation and the mounting national debt underscore the urgent need for measures to improve the financial situation.