Deputies of the Verkhovna Rada approved the draft state budget of Ukraine for 2024 with record expenses and deficits in the entire history of Ukraine, but also with an increase in social standards and a forecast dollar exchange rate reduced to 40.7 UAH. Parliamentarians met the legal deadline for reviewing the project – no later than November 20.
Voting for the draft finalized by the Cabinet of Ministers in the second reading took place on November 9. 276 people’s deputies voted in favor, a Golos representative said. Yaroslav Zheleznyak. The votes were distributed by faction as follows:
“Servant of the People” – 199; “European solidarity” – 0; “Fatherland” – 0; “Platform for life and peace” – 16; “For the future” – 11; “Voice” – 14; “Trust” – 16; “Restoration of Ukraine” – 10; non-fractional – 10.
Budget 2024 adopted in second reading – voting results
Now the document must be signed by the speaker of parliament and the president of Ukraine. After this, the 2024 budget will be officially published and come into force.
During the presentation of the 2024 budget in parliament, Finance Minister Sergei Marchenko assured that next year they will not launch a “printing press” in Ukraine, even despite record expenses. However, for this, the warring country requires maximum support from its partners.
“I am confident that the Administration [президента США Джо] Biden will find a way out to finance Ukraine. It is important for us because it is grant support. We are not talking about any emission financing; we will find an opportunity to finance the needs through external assistance,” Marchenko emphasized.
The estimate was adjusted before final acceptance. Among the main innovations:
The consumer inflation rate has been reduced – price growth is expected to be 9.7% instead of 10.8% (December compared to December last year). The assumption for the dollar exchange rate was adjusted to 40.7 UAH/USD. (average exchange rate for the year) compared to 41.4 UAH in the preliminary forecast; the forecast for real GDP was reduced to 4.6% (in the first reading it was 5%).
Key indicators of the forecast in the 2024 budget
Despite the fact that budget revenues increased by UAH 22 billion, to UAH 1.768 trillion, expenses remained at the highest level in the entire history of Ukraine – UAH 3.35 trillion. Accordingly, the budget deficit was also reduced by UAH 22 billion, to UAH 1.57 trillion.
Revenues, expenses and budget deficit 2024
External loans decreased by 103.5 billion (from $42.9 billion to $41 billion), i.e. Ukraine plans to borrow UAH 1.5 trillion abroad in 2024. The decrease in external borrowings was partially offset by an increase in internal borrowings by UAH 81.4 billion.
“Thus, external borrowing in 2024 will amount to 100 percent of total revenues,” says the explanatory note to the draft budget. The state will also take on debts on the domestic market: issue its own debt securities (domestic government loan bonds).
They are sold and then the money is returned to the buyers with interest. But the funds received will be spent only on servicing domestic debt. In total in 2024 you will have to spend:
to repay the entire public debt – UAH 606.4 billion; to repay external debt – UAH 184.8 billion; to pay off domestic debt – UAH 421.5 billion.
According to Marchenko, Ukraine is already budgeting $31.9 billion in revenues from international partners. This is $5.4 billion from the IMF, 8.5 billion from the United States, $18 billion from the EU.
However, this is not the entire amount – in total, $41 billion is needed. “Those that remain ($9.1 billion) will be sought in negotiations with the governments of Canada, Norway, Japan and South Korea. A little more – the World Bank,” – reported People’s Deputy Yaroslav Zheleznyak with reference to Marchenko’s words in the Rada.
In the finalized state budget, inflation is expected to be 9.7%. That is, price growth in Ukraine will continue, but its pace will decrease significantly compared to, for example, 2022, when annual inflation reached 26.6%. The official unemployment rate is also expected to decline from almost 19 to 13.4%.
Despite serious difficulties, wage increases are still predicted in Ukraine. The average salary, according to budget calculations, next year will be UAH 21,809.
The budget itself also includes an increase in the minimum wage. In 2024, it will be increased in January from 6,700 to 7,100 UAH and in July to 8,000 UAH.
The cost of living will also be reviewed. And alimony, pensions, a number of payments, subsidies, etc. are tied to it. For example, the minimum pension will increase in 2024 from 2093 to 2361 UAH.
Social standards in the 2024 budget
In addition, as the Cabinet of Ministers assures, from March 1 there will be a general indexation of pensions, and according to new rules. In particular, they will introduce the so-called. pension points. It is expected that this will help balance the payments of those who retired a long time ago with the payments of “young” pensioners.
Priority funding in the 2024 state budget is provided for defense needs. About half of all expenses will go towards this:
The Ministry of Defense will receive UAH 1.155 trillion (and this amount can still be increased during future revisions of the already prepared estimate; the National Guard is allocated UAH 102.2 billion; the National Police will receive funding of UAH 89.5 billion; State Border Service – UAH 60.34 billion; Main Intelligence Directorate – 18.07 billion UAH; Foreign Intelligence Service – 5.96 billion UAH.
More than UAH 7 billion are each provided for the expenses of the Ministry of Strategic Industry and the State Special Communications Service (7.87 billion and 7.27 billion, respectively). The SBU will receive UAH 34.82 billion, and the Ministry of Internal Affairs will receive UAH 14.08 billion.
Financing of defense and security in the 2024 budget
As OBOZ.UA reported, earlier the Minister of Finance of Ukraine Sergei Marchenko warned: delays in helping Ukraine will hit hard throughout Europe. If Ukraine does not receive sufficient macro-financial assistance in 2024, the EU may face rising prices and a new influx of Ukrainian refugees.
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2023-11-09 11:32:00
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