Photo by Mufid Majnun on Unsplash

Parliament will vote on the matter in the middle of October, hoping to decrease the budget deficit in Ukraine and increase spending on digitalization. 

Ukraine has to approve the state budget for next year soon, and the first draft reveals some of the government’s priorities. On the macro level, Ukraine expects GDP to grow by 3.8 percent next year, and inflation to decrease to 6.2 percent, according to Kyiv Post

Revenue is expected to grow by $6 billion to $47 billion, while expenditures will increase by $3.8 billion to $55 billion. As a result, it will reduce the government’s budget deficit to 3.5 percent from the current 5.5 percent during 2022. 

Graph by Tradingeconomics: Ukraine Government Budget deficit 

The Ukrainian Ministry of Finance expects an increase in exports of 9.2 percent and an increase in imports of 6.5 percent. The result of this is more value-added taxes to the state budget, and the Ukrainian government also expects higher income taxes as a result. 

Not everything is set in stone

The proposal is only a draft and can change in parliament, but it is still an indicator of the government’s ambitions for 2022. Among other things, the draft also says that the government expects the costs of housing, food, and healthcare to increase next year, which will result in an increase in the minimum wage from $243 to $250. 

Kyiv Post writes that the most significant expenditures in 2022 will be security and defense, pensions, healthcare, education, the ministry of defense and road infrastructure, receiving $11 billion, $7.4 billion, $7 billion, $6.9 billion, $4.9 billion and $4.6 billion respectively. 

The government expects to use $295 million on digitalization of the country, which is a sharp increase from the $103 million allocated this year. This money will go to better internet in rural areas, education, and preparation for population census. 

The draft also sets to increase the budget for roads and the Ukrainian space industry. The government also wants to increase the budget on law enforcement agencies such as Ukraine’s National Security and Defense Council, which might receive 21 percent extra.