KYIV: Kyiv will spend more than 60 percent of its entire state budget on defence and security next year, according to a draft plan, as Russia’s invasion grinds on.
Moscow’s war has battered the Ukrainian economy over the last two and a half years, causing tens of billions of dollars in destruction, punching a huge hole in state finances and forcing Kyiv to rely on Western support to keep itself afloat.
In a draft plan presented by the finance ministry, Ukraine said it will spend 2.22 trillion hryvnia ($54 billion) on “national security and defence” in 2025.
That represents around 26 percent of Ukraine’s GDP and 61 percent of the government’s overall outlays, planned at 3.64 trillion hryvnia.
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“I can confidently say that based on the budget plan for 2025, Ukraine’s defence will be ensured,” Ukraine’s Finance Minister Sergiy Marchenko told reporters Tuesday.
By comparison, Russia plans to spend 10.8 trillion rubles ($115 billion) on defence this year, or about 30 percent of its budget.
In Ukraine, around 740 billion hryvnia would go on weapons production and procurement, with almost 1.2 trillion on soldiers’ salaries.
Marchenko warned Ukraine faces “rather slow economic growth due to the impact of attacks on energy infrastructure,” predicting GDP would expand by 2.7 percent next year.
Kyiv last week upped its planned defence spending for 2024 by almost one-third amid mounting war costs.
The 2025 defence budget is set to be just two percent higher than the revised 2024 figure.
Ukraine said it will need $38.4 billion in financial support from its Western backers and international financial organisations, slightly down on this year’s requirements.
The war-torn country has received $98 billion in international financial aid since Russia invaded in February 2022 – on top of tens of billions in military and humanitarian aid.
“This is perhaps the most important area – to ensure rhythmic and full funding from our partners,” Marchenko said.
Under the proposals, Kyiv envisages a roughly 70 percent increase in revenues from personal income taxes next year.
Marchenko said inflation would also remain high in 2025, coming in at 9.5 percent.
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