The Verkhovna Rada has presented the draft budget for next year. The presentation was delivered by Finance Minister Serhii Marchenko, according to the session broadcast.
The budget is based on the assumption that the war will continue throughout next year. It takes into account the risks of the heating season and a shortage of air defence.
Marchenko also outlined the main challenges at present. There is already a decline in budget revenues due to business losses. By the end of the year, the Tax Service is expected to fall short of its targets by 70 billion hryvnias. A liquidity crisis could potentially occur.
“Next year we have an uncovered financial need of $32.6 billion. This is a figure that has already been stated; it is what we are working on,” he said.
To cover the deficit, they are working with international partners. The most promising source is work with frozen Russian assets. They are also working on structuring the ERA Loan, an initiative by the G7 countries. They will step up the work of the group on bringing Ukraine’s economy out of the shadows and are implementing European Union directives on taxation.
The need for external financing remains stable and in practice is not decreasing. For next year it has been estimated at $52.6 billion — the highest figure since the start of the full-scale war. In 2022 the need was $31.1 billion, in 2023 — $42.5 billion, in 2024 — $41.7 billion, last year — $52.4 billion, and this year — $50.8 billion.
“$20 billion — we already have an understanding of the sources to cover this need,” the minister said.
GDP growth is forecast at 1.3%, inflation at 8, and the average annual hryvnia exchange rate at 47.1 UAH per US dollar. Budget revenues are expected at 5 trillion 648 billion UAH. The increase compared with the current year is 450 billion UAH. This already includes funds from taxing digital platforms and parcels containing goods purchased on foreign marketplaces.
Expenditure is 7 trillion 272 billion UAH. Of this, more than 4 trillion is for the security and defence sector.
Roksolana Pidlasa, head of the tax committee, noted that the draft complies with the Budget Code. Expenditure, together with the provision of loans from the budget and repayment of public debt, exceeds 8 trillion hryvnias.
“That is four times more than before the full-scale invasion,” she said.
One day of war costs Ukraine $190 million per day, the MP noted.
Ukraine’s own resources in next year’s budget will amount to about 3 trillion hryvnias, with a further 4.3 trillion to be covered by international assistance.
Under the rules of procedure, the Cabinet of Ministers must submit the draft by 15 September, at least four days before the presentation. Therefore, today’s submission took place in breach of the rules, MP Artur Herasymov (European Solidarity) stressed. He asked for a vote on rejecting the draft budget, but there were not enough votes. By the end of the presentation, only a few dozen MPs remained in the chamber.
MPs will submit amendments until 1 October.