The Verkhovna Rada adopted the state budget for 2024

On November 9, the Verkhovna Rada (the Ukrainian Parliament) adopted draft law No. 1000 on the state budget for 2024 in the second reading. It was adopted in the first reading on October 19, but the committee still made changes to it.

276 MPs supported the adoption of the countryʼs main estimate, as the deputy of the "Voice" faction Yaroslav Zheleznyak informed.

The budget for the second reading was significantly improved, in particular, its revenue part was increased, sources of financing the deficit were redistributed and funding for state authorities was reduced.

In general, the document defines three main priorities of the country: security and defense, social sphere, and business assistance.

The main changes from the first to the second reading by macro indicators:

• budget revenues increased by UAH 22 billion and they amount to UAH 1.768 trillion;
• expenditures almost did not change — UAH 3.35 trillion;
• the deficit of the state budget was reduced by UAH 22 billion and now it amounts to UAH 1.57 trillion;
• external borrowing was reduced by UAH 103.5 billion (from $42.9 billion to $41 billion to agree with the IMF), offset by an increase in domestic borrowing by UAH 81.4 billion;
• the forecast for real GDP was reduced to 4.6% (in the first reading it was 5%);
• inflation forecast — 9.7% (in the first reading it was 10.8%);
• assumptions about the hryvnia exchange rate — an average of 40.7 hryvnias per dollar for the year (it was 41.4 hryvnias per dollar).

Other changes in specific expenses:

• laid down the norms of draft law No. 10037 on "military personal income tax" in the text of the budget (we wrote more about this here);
• allowed the government to reprofile the bonds bought by the NBU;
• "UkrFinCompany" was set to attract 20 billion through DSLB;
• they left all the money for the production of TV series (445 million UAH);
• increased spending on the State Space Agency by UAH 357 million;
• 70% of the budget (+ UAH 241 million) was added to AMCU.

The largest increases occurred in the Ministry of Finance (+0.68 billion UAH, but these are scanners), the Ministry of Social Policy (+0.58 billion UAH) and the Ministry of Health (+0.53 billion UAH).

The largest reductions occurred in the Ministry of Stratprom and the State Service of Special Communication (SSSC) — (each minus UAH 4.8 billion), but they went to the article "for logistical and technical support of military units of the Armed Forces" in the amount of plus UAH 9.6 billion.

They also took part of the funds from the Ministry of Culture (minus 0.4 million hryvnias, this was taken from the Holodomor Museum) and BEB (minus 0.4 billion hryvnias).

How much and what is the money pledged for?

The head of the parliamentary budget committee Roksolana Pidlasa reported on Facebook that the budget underwent minimal changes before the second reading.

The revenue plan was raised by UAH 22.2 billion due to an increase, first of all, in VAT on goods imported into Ukraine, as well as bank income tax, import duties and rent payments.

The main item of expenditure next year is defense. This is 22.1%, or UAH 1.69 trillion.

Expenditures for the development of the defense-industrial complex are also planned: UAH 43 billion for the production of unmanned systems and UAH 43 billion for the production of ammunition and weapons. Funds for the security and defense sector are covered exclusively by internal revenues — taxes, customs payments, dividends of state-owned companies, privatization and funds from the placement of Domestic State Loan Bonds (DSLB).

The remaining expenses fall into the deficit. They are planned to be covered at the expense of external borrowings (1.67 trillion UAH) and placement of government bonds (525.9 billion UAH), as well as at the expense of revenues from privatization (4 billion UAH).

Of these funds, almost UAH 470 billion will be allocated to social protection. Almost 15 billion hryvnias are allocated to support veterans (of which one billion is for prosthetics for soldiers). Expenditures on medicine and education will amount to UAH 201 billion and UAH 69 billion, respectively. Also, one billion will go to demining agricultural land.