Zelenskyy signs 2024 budget into law

Ukrainian President Volodymyr Zelenskyy has signed Ukraine’s budget for 2024.

Source: Verkhovna Rada (Ukrainian Parliament) website

Details: "Returned signed by the President of Ukraine. The act is being disseminated," reads the draft budget’s status on the Verkhovna Rada website

The Verkhovna Rada adopted the 2024 state budget during a session on 9 November. A total of 276 members of the Ukrainian parliament voted in favour of the budget (out of a total of 450 Verkhovna Rada members).

Overall, state budget revenues were set at UAH 1.8 trillion (approximately US$49.5 billion) and expenditure at UAH 3.35 trillion (US$92.2 billion). [All conversions into US dollars are approximate - ed.]

Defence spending constitutes the main category of expenditure at 22.1% of Ukraine’s GDP; UAH 1.69 trillion (US$46.5 billion) will be allocated to Ukraine’s security and defence forces.

The 2024 budget also provides for spending on growing Ukraine’s defence industry: 

• UAH 43 billion (US$1.2 billion) to manufacture UAVs;
• UAH 43 billion (US$1.2 billion) to manufacture ammunition and weapons.

"Funds for the national security and defence sector are derived exclusively from domestic revenues: taxes, customs duties, dividends from state-owned companies, privatisation proceeds, and revenue from issuing domestic government bonds," said Roksolana Pidlasa, Chairwoman of the Verkhovna Rada’s Budget Committee.

The rest of the expenditure falls within the budget deficit, which is estimated at UAH 1.57 trillion (US$43.2 billion). The state budget will be financed through external borrowings (UAH 1.67 trillion or US$45.9 billion), the issuance of domestic government bonds (UAH 525.9 billion or US$14.5 billion), and privatisation proceeds (UAH 4 billion or US$110 million).

Nearly UAH 470 billion will be allocated for social benefits (US$12.9 billion), and UAH 15 billion (US$413 million), twice as much as last year, will be allocated to support veterans, including UAH 1 billion (US$27.5 million) for prosthetic devices for soldiers.

Healthcare and education spending will amount to UAH 201 billion (US$5.5 billion) and UAH 69 billion (US$1.9 billion) respectively.

The following amendments were made to the draft budget during its second reading:

• UAH 1 billion (US$27.5 million) was allocated for the demining of agricultural land;
• The government was instructed 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;
• A provision on reprofiling domestic government bonds owned by the National Bank of Ukraine was removed, as this requires IMF approval;
• An additional subsidy for the construction of shelters in hospitals was created (UAH 1 billion or US$27.5 million).

The macroeconomic forecast on which the budget calculations were based was also amended for the second reading:

• Real GDP growth is now projected at 4.6%;
• Inflation is projected at 9.7%;
• The average annual exchange rate to the US dollar is projected at UAH 40.7.

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