KYIV (Reuters) – Ukraine’s parliament gave preliminary approval on Thursday for the 2024 budget, which aims to allocate more funding to the army and national defense due to the ongoing war with Russia.
The Finance Minister, Serhiy Marchenko, stated that the government’s primary goals for the following year include accumulating funds for defense and security, as well as ensuring social payments for the population in order to bring Ukraine closer to victory.
According to lawmaker Yaroslav Zhelezniak on the Telegram messaging app, the budget law, which passed its initial reading, sets budget revenues at 1.7 trillion hryvnias ($46.4 billion), and expenses are projected to reach 3.3 trillion hryvnias.
It is estimated that the budget deficit will amount to approximately 1.6 trillion hryvnias.
Officials have specified that around half of the state budget is earmarked for the defense sector in the upcoming year.
Marchenko stated to Reuters last week that donor “fatigue” is increasing as the war with Russia continues, but he intends to continue working with international partners to secure the necessary funds to narrow the budget gap.
Ukraine has received nearly $34 billion in Western financial aid this year, following the $31 billion received in 2022.
Last year, the economy contracted by approximately one-third as millions of people fled due to the war, towns and cities were targeted by bombings, and logistics routes and supply chains were disrupted. Additionally, the power sector and critical infrastructure suffered damage from air strikes.
However, nearly 20 months after Russia’s full-scale invasion, Kyiv asserts that businesses in Ukraine have adjusted to the new reality and maintains a cautious optimism regarding economic prospects for the remainder of this year and 2024.
The government predicts economic growth of around 5% for the next year, following an expected increase of 4.7% in the current year.
Kyiv finances its defense spending through tax revenues, duties, and domestic borrowing, while Western aid helps fund social and humanitarian expenditures.
This year, the government initially planned to allocate 1.1 trillion hryvnias to defense, but has had to increase military spending twice.
The budget still requires approval in the second reading by Parliament.
(Editing by Timothy Heritage)
