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· Social spending is another major expenditure item at UAH470bn ($12.9bn). Veterans will receive increased social payments, reaching almost UAH15bn ($413mn), doubling last year's allocation. This includes a UAH1bn ($27.5mn) allocated for prosthetic devices for soldiers. Some 20,000 to 60,000 soldiers have lost limbs during the fighting with Russia, according to various reports.
· Budgetary allocations for healthcare and education are set at UAH201bn ($5.5bn) and UAH69bn ($1.9bn), respectively.
Amendments were introduced to the draft budget ahead of the second reading, covering various areas such as mine-clearance of agricultural land, the development of a mechanism for regulating the write-off of debts on medium-term loans granted to local budgets in 2009-2014, and the removal of provisions related to reprofiling domestic government bonds owned by the National Bank of Ukraine, subject to IMF approval. Additionally, UAH1bn was allocated to the construction of shelters in hospitals.
The macroeconomic forecast forming the basis for budget calculations underwent revisions for the second reading, including a projected real GDP growth of 4.6% in 2024, an inflation rate of 9.7%, and an average annual dollar exchange rate of UAH40.7 to the dollar.
6.1.1 Budget dynamics - results
The Verkhovna Rada of Ukraine has approved the state budget for 2024, featuring a deficit of UAH 1.57 trillion, which accounts for 20.6% of the projected GDP. This deficit is notably lower than the state budget for 2023, which had a deficit of UAH 2.01 trillion, equivalent to 31.1% of the projected GDP, Interfax Ukraine reported on November 9.
The state budget anticipates total revenues of UAH1.78 trillion ($49bn), and expenditures almost twice as much at UAH3.35 trillion ($93bn).
A substantial portion of the budget, approximately 22% of Ukraine's GDP, has been allocated for military funding, totalling UAH1.69 trillion ($46.4bn).
Within the military spending allocation, UAH43bn ($1.1bn) has been earmarked for the production of drones, with an equal amount allocated for the domestic manufacturing of arms and ammunition. Funding for the domestic defence industry will be sourced from internal revenue, including taxes and other financial streams.
Additionally, UAH15bn ($413mn) has been designated for veterans' services, with UAH1bn ($27.5mn) specifically allocated for prosthetics.
The budget also encompasses provisions for various other domestic expenditures and social services.
The remaining expenditures will contribute to the budget deficit, which has been set at UAH1.57 trillion ($44bn). To finance this, the budget includes UAH2 trillion ($55bn) in external borrowing and internal government bonds.
According to the Ministry of Finance, the projected state budget revenues for
64 UKRAINE Country Report December 2023 www.intellinews.com