Ukraine’s Prime Minister Denys Shmyhal announced his resignation on Tuesday as part of a significant government reshuffle during wartime. This marks the largest reorganisation of the government since the conflict began.

President Volodymyr Zelenskyy has put forward First Deputy Prime Minister Yulia Svyrydenko, who also serves as the economy minister and is a close, long-time associate of Zelenskyy, to take over as prime minister. Shmyhal, who has held the position since March 2020, is expected to become the new defence minister.

A parliamentary vote on Svyrydenko’s nomination is scheduled for later this week. Zelenskyy shared that he has already discussed key priorities with her for the coming six months, including boosting domestic weapons manufacturing and pursuing reforms aimed at unlocking Ukraine’s economic growth.

This major reshuffle comes amid ongoing Russian military advances in eastern Ukraine and a bleak outlook for a swift ceasefire. Despite the resilience of local businesses and substantial Western aid helping to stabilise the economy, Ukraine’s economic output remains below pre-war levels.

Looking ahead to 2026, Ukraine faces the challenge of managing a growing budget deficit while foreign assistance is expected to decline. Officials have indicated the country will require approximately $40 billion in external funding next year.