Business news from Ukraine

Forecast under state budget from the Ministry of Economy assumes continuation of large-scale war until the second half of 2024

16 September , 2023  

The macro forecast of the Ministry of Economy, which formed the basis of the draft state budget-2024, assumes a sharp improvement in the security situation from the second half of next year and, as one of the consequences, an acceleration of economic growth to 5% in 2024 and 7-7.5% in 2025-2026.

“Further economic development of Ukraine depends on the duration and active phase of military operations… Thanks to the military successes of Ukrainian defenders and protectors, a significant reduction of security risks is expected from the second half of 2024, which will positively affect the indicators of economic and social development of Ukraine for 2025-2026,” the document says.

According to the forecast, dated mid-June this year, inflation (at the end of the year) will fall to 10.8% next year, to 7% in 2025 and 5.8% in 2026.

Other estimates include unemployment falling from 18.8% this year to 10.8% in 2026.

In the formation of the revenue side is expected to increase revenues from the National Bank in 2025 to 103.9 billion UAH from 17.7 billion UAH in 2024 with a subsequent reduction to 15.4 billion UAH.

As reported, the government on Friday approved the draft state budget-2024 with revenues of UAH 1 trillion 746.3 billion, expenditures of UAH 3 trillion 108.2 billion and a marginal deficit of UAH 1 trillion 593.6 billion.

In relation to the current law on the state budget-2023, it is proposed to increase revenues by 25.6%, expenditures – by 7.6%, and reduce the deficit by 7.3%.

At the same time, this week the government submitted to the Rada a draft law No. 10038 with amendments to the state budget-2023 to increase its expenditures by 328.5 billion hryvnias due to the growth of internal loans by 207.6 billion hryvnias and external loans by 91.2 billion hryvnias.

Compared to it, revenues in the draft state budget-2024 are higher by 23.3%, or by 329.9 billion UAH, while expenditures are lower by 2.5%, or by 84 billion UAH, and the deficit – by 20.7%, or 416.8 billion UAH.
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