Where Ukraine will take and what it will spend money on in 2025. Analysis of the state budget
On the evening of September 13, the government agreed on the main budget for which the country will live in 2025. The document was submitted to the Verkhovna Rada just when deputies are considering changes to the budget for the current year.
Its spending should increase by half a trillion hryvnias at once so that the state can finance combat payments to soldiers in August and the following months.
In peacetime, a "miss" in budgeting half a trillion hryvnias could be reason enough to resign not only the finance minister but the entire government. However, during the Great War, the tetanus to the budget of several hundred billion hryvnias became commonplace.
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Almost certainly such rights are expected and the budget for 2025. At the same time, at the stage of its passage through the parliament.
Basic figures
Each budget is calculated by the Ministry of Finance on the basis of a macroeconomic forecast drawn up by the Ministry of Economy. After all, in order to determine how many taxes can be collected, you need to know the exchange rate, inflation and economic growth rates.
- Inflation next year will be 9.5% (7.9% this year), and the average salary will increase from UAH 20,581 to UAH 24,389 per month. At the same time, unemployment will decrease from 18.2% to 17.7%.
The average annual dollar exchange rate in 2025 is expected at UAH 45.
The main social indicators in the budget left the government unchanged:
- minimum wage – UAH 8,000;
- subsistence level (total) – UAH 2920;
- subsistence level (for able-bodied persons) – UAH 3028;
- subsistence level (for persons who have lost their ability to work) – UAH 2361.
The government also left in the 2025 budget the rules on "special" subsistence minimums, in particular the one used to determine the salaries of judges and civil servants (UAH 2,102) and the one used to determine compensation for pensioners who have won court cases. states on surcharges for living in the Chernobyl zone (1600 UAH).
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Income the budget will be UAH 2,336 trillion.
They will grow by UAH 192 billion or 9% compared to the 2024 plan.
Most of this increase will provide revenues from direct taxes – by UAH 179.8 billion. In particular, personal income taxes should increase by UAH 158 billion and UAH 21.8 billion from income tax.
It is likely that such revenue growth should provide for a tax increase not yet voted by the Council, which provides for an increase in military income tax from 1.5% to 5%.
- Despite the fact that the present entity was not approved even in the first reading, Minfin still calculated income indicators on the basis of the new tax rates set in it. Also in 2025, the state budget will continue to receive PIT from the income of servicemen.
- In addition, the government is investing an increase in VAT revenues from goods and services produced inside Ukraine – from UAH 289.1 billion to UAH 318 billion, from imported goods and services – from UAH 498.9 billion to UAH 593.8 billion. UAH.
From the National Bank to the budget in 2025 should receive UAH 63.9 billion, which is significantly higher than this year's (UAH 38.64 billion).
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- It is planned to cover it mainly from external sources.
In the domestic market, the government plans to raise UAH 579.2 billion, most of which will be spent on repaying previously placed bonds (UAH 561.9 billion).
In total, the government expects to spend UAH 203.5 billion on external debt interest payments, and UAH 277.33 billion on domestic – UAH 480.8 billion).
What will they spend money on. . .
Defense
As in the previous three years, the most funds are planned to be spent on defense. In total, it is about UAH 2.2 trillion or 26.3% of GDP. Traditionally, most will be redistributed through the budget of the Ministry of Defense.
This is not surprising: the government has set lower defense spending during the 2023 and 2024 budgets. The reduction in projected expenditures does not indicate that the state plans to cut military funding or that the authorities expect the war to end by the end of 2025.
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It only shows that this year, as in previous ones, the government is betting on defense as much as the projected revenue base allows. Therefore, it is likely that in the event of the adoption of the budget in the current version, the Council will make multibillion-dollar changes to the budget in the middle of next year. After all, the parliament has done the same in recent years, and is doing in 2024.
It is noteworthy that the defense budget is expected to further reduce expenditures on the purchase and modernization of military equipment – from UAH 656.7 billion to UAH 487.7 billion. And expenditures on the provision of the Armed Forces (include payments to servicemen) will increase from the planned this year 806.3 billion UAH to more than 1 trillion UAH.
Expenditures of other defense agencies in 2025 will be almost at the current level. Thus, the SBU has 41.7 billion UAH (41.7 billion UAH this year), and the Main Intelligence Directorate of the Ministry of Defense (GUR MO) will even reduce – from UAH 30.7 billion to UAH 24.8 billion.
The budget of the Ministry of Internal Affairs, which includes the State Border Guard Service and the National Guard, will increase significantly. In 2025, the government expects to spend UAH 438.2 billion on this agency compared to UAH 351.8 billion in the current year.
However, if we compare the budget of the Ministry of Internal Affairs for 2025 with the actual expenditures of 2023, they will remain almost unchanged – growth will be only about 10 billion UAH.
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Expenditures on education will be lower for 2025 than in 2024: UAH 167 billion against UAH 175 billion. Most of them – over UAH 103 billion – will go to pay teachers.
At the same time, the government is laying on the 2025th and a number of additional programs. In particular, UAH 2.9 billion to provide food for primary school students, UAH 305 million – for education by students with special educational needs (at the level of 2024).
The government is laying UAH 323.9 million to restore the schools destroyed and damaged by the war. Another UAH 37.4 million will be spent within the Superhero School program – is the education of children in long-term treatment. And UAH 150 million will go to teaching teachers the methods of teaching the New Ukrainian School.
In addition, UAH 12.6 million is planned to be spent on educational services for children abroad.
Health expenditures in 2025 plan to increase – by UAH 7 billion to UAH 214 billion. In particular, 175 billion UAH should go to the implementation of the program of medical guarantees.
The budget for 2025 will provide UAH 11.75 billion for the purchase of drugs for the treatment of HIV / AIDS, tuberculosis, oncology, rare orphan diseases and cardiovascular diseases.
UAH 939.1 million will be spent on medical services for defenders, including boboprosthetics, as well as the collection, cryopreservation and storage of reproductive cells.
Social sphere
Social expenditures in the 2025 budget will be reduced by UAH 50 billion to UAH 420.6 billion. Traditionally, most of the funds provided in this area, the government will spend a grant to the Pension Fund – UAH 280.2 billion.
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The second largest article of these expenditures – program of social protection of citizens who have found themselves in difficult life circumstances. It is planned to spend UAH 80.8 billion next year.
The reduction in social security expenditures may be due to the fact that in 2024 there were some more funds in this area than will actually be spent. That is why this year's changeover to the state budget provides for a reduction in some social spending.
They plan to spend UAH 42.32 billion on housing subsidies in 2025. They will receive 2.8 million households.
As stated in the explanatory note to the State Budget Interpretations, this amount of recipients is calculated as a result of increasing the addressability of the payment of subsidies and the termination of these payments to persons living abroad or living in temporarily occupied territories.
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Expenditures to finance veteran policy activities next year plan to significantly reduce: from UAH 13 billion in 2024 to UAH 6 billion. However, this year the Ministry of Veterans Affairs is in no hurry to master its budget and as of July managed to use only UAH 3.4 billion.
Economic development and infrastructure
In the context of the state budget deficit, the government has set significantly fewer funds to support business in 2025.
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At the same time, the government will leave a program to provide grants for business creation (UAH 1.37 billion), compensation for humanitarian demining costs (its volume has been reduced by three times to UAH 1 billion) and expenditures on the Entrepreneurship Development Fund through which the program is implemented "5-7-9 "(will send UAH 18 billion, as this year).
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Funding for the Road Fund will also continue in the next budget. It has 43.2 billion UAH. However, more than half of this amount will be spent by the government on servicing the debts of the former "Ukraktodor" (now the Recovery Agency) – UAH 24.35 billion.
Budget of unpopular decisions
For three years now, there have been virtually two budgets in Ukraine. The first – war budget. These are expenditures that can only be financed by funds that the government manages to collect within the country with taxes, state-owned dividends, domestic borrowing, privatization proceeds, and so on.
Second budget – civilian. These are all expenditures not related to the war: education, health care, social sphere, culture, infrastructure, etc. These programs Ukraine finances with funds received from partners.
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Due to this budget duality, the state has almost no room for maneuver when the financial year is not according to the budget plan.
We need to finance the war. What taxes will increase
Previously, additional needs were funded without unpopular solutions. Thus, in 2022, Natzbank came to the rescue, which lent the government UAH 400 billion. In 2023, additional needs were financed by the decision to collect from local communities a tax on the income of the physoids from the income of servicemen. In addition, the Council "retrospectively" taxed banks' profits at a rate of 50%.
This year the money is trying to find directly in the pockets of Ukrainians. In particular, the Ministry of Finance presented a representative who proposes to increase the rate of military collection on citizens' income from 1.5% to 5%, as well as to introduce such a fee for FOPs.
U the first edition of the there were still many unpopular tax innovations, such as military mobile tax, jewelry, first car registration, real estate purchase, and turnover tax. However, most of these points have now been decided to abandon.
As a result, of the 125 billion UAH expected by the Ministry of Finance, tax increases in such a limited form could yield only about UAH 30 billion by the end of 2024.
Apparently, that's why the deputies rejected the revised tax proposal of the government. After all, they understand that next year they will have to look for money in the pockets of Ukrainians again and raise taxes. However, such an increase will be even more unpleasant and unpopular.
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- The first offer could theoretically bring an additional UAH 80-160 billion per year, but will automatically lead to higher prices for all goods and services.
- The second will provide a budget of UAH 33 billion in 2024-2025, but will be implemented retrospectively and is likely to affect the ability and willingness of banks to support the budget by buying government bonds.
Let it be there, but the draft law on the state budget for 2025 is undergoing significant changes before the parliament approves. In particular, under the influence of compromise on how the government will raise taxes to Ukrainians.
As the practice of previous years shows, the adoption of the budget – is more of a formality. After all, no one can predict the course of hostilities and, accordingly, the volume of military expenditures for the year ahead in the war.
The only thing that both the government and parliament – can do is provide a sufficient revenue base for the budget today, so that at a critical time it is not necessary to make unpopular, unforeseen and difficult decisions for the economy.
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