The Verkhovna Rada [Ukrainian parliament – ed.] adopted the draft state budget for 2024 at a meeting on 9 November. A total of 276 MPs voted for the country's main budget.
Source: Roksolana Pidlasa, Head of the Parliamentary Committee for Economic Development
Details: Pidlasa noted that the draft budget for the next year had undergone minimal changes for the second reading.
Thus, the revenue plan was increased by 22.2 billion hryvnias (about US$606.2 million) due to an increase in VAT on goods imported into Ukraine, as well as bank income tax, import duties and rent.
The main item of expenditure is defence, with 22.1% of expenditures, or 1.69 trillion hryvnias (about US$46.5 billion), allocated to the security and defence forces.
The 2024 budget also provides for spending on the development of the defence industry:
- 43 billion hryvnias (about US$1.18 billion) for the production of UAVs;
- 43 billion hryvnias for the production of ammunition and weapons.
Quote from Pidlasa: "Funds for the national security and defence sector are covered exclusively by domestic revenues: taxes, customs duties, dividends of state-owned companies, privatisation and funds from the placement of domestic government bonds."
More details: The rest of the expenditures fall within the budget deficit, which is included in 1.57 trillion hryvnias (about US$43.2 billion). The state budget will be financed by external borrowings (1.67 trillion hryvnias, which is about US$46 billion), placement of domestic government bonds (525.9 billion hryvnias, which is about US$14.4 billion), and privatisation proceeds (4 billion hryvnias, which is about US$110 million).
Almost 470 billion hryvnias (about US$12.9 billion) will be allocated for social protection. Almost 15 billion hryvnias (about US$413 million) will be allocated to support veterans, which is twice as much as last year, including 1 billion hryvnias (about US$27.5 million) for prosthetic devices for soldiers.
Expenditures on healthcare and education will amount to 201 billion hryvnias (about US$5.5 billion) and 69 billion hryvnias (about US$1.9 billion) respectively.
In preparation for the second reading, amendments were added to the draft budget on:
- 1 billion hryvnias for the mine-clearance of agricultural land,
- instruction to the Government to develop a mechanism to regulate the write-off of debts on medium-term loans granted to local budgets in 2009-2014 by the State Treasury (instead of writing off such debts at the expense of free balances),
- removal of the provision on reprofiling of domestic government bonds owned by the National Bank of Ukraine, as this issue requires approval from the IMF;
- creating an additional subvention for the construction of shelters in hospitals (1 billion hryvnias).
The macroeconomic forecast, which is the basis for budget calculations, has also been amended for the second reading:
- real GDP growth is now forecast at 4.6%;
- inflation – 9.7%;
- the average annual dollar exchange rate is 40.7 hryvnias.