KYIV: The Ukrainian parliament has approved the state budget for the upcoming year, with a focus on bolstering the country’s military and defenses in the face of the ongoing 20-month war with Russia.
The budget outlines revenues of 1.77 trillion hryvnias ($48.4 billion) and planned spending of 3.35 trillion hryvnias, resulting in a substantial budget deficit of approximately $43.58 billion for 2024, as indicated by government officials.
In the upcoming year, over half of Ukraine’s budget allocations are designated for the defense sector to support the ongoing war against Russia, which initiated a full-scale invasion in February 2022.
Prime Minister Denys Shmyhal, commenting after the budget approval, highlighted the clear priorities set in the budget, stating that internal resources would be dedicated to resisting and prevailing over the enemy.
He highlighted that nearly 50% of the spending would be directed towards defense and security, focusing on acquiring more weapons, vehicles, drones, ammunition, and missiles.
Shmyhal also outlined plans to increase minimum wages and pensions to assist millions in coping with the rising cost of living during the war. The budget, supported by 276 deputies, also envisions higher spending for the education and health sectors in the coming year.
Finance Minister Serhiy Marchenko acknowledged the importance of financial aid from Ukraine’s Western allies to cover the budget gap and fund social and humanitarian expenditures. While the government received $35.4 billion this year and around $31 billion last year from its partners, securing foreign financial support in the next year might pose challenges, given the growing donor fatigue as the conflict persists.
The government’s economic outlook for the upcoming year includes a forecasted GDP growth of 4.6%, following an expected nearly 5% increase this year.
Last year, the Ukrainian economy contracted by nearly a third due to the impact of the war, resulting in mass displacement, infrastructure damage, and severe disruptions to supply chains. With the conflict entering its 21st month, businesses and citizens have adapted to the wartime reality, but the government and analysts acknowledge ongoing risks and uncertainties.
