The budget process has begun. On September 13, the government approved the draft state budget for 2023, and on September 14 it submitted it to the Verkhovna Rada.
As Yury Aristov, chairman of the Verkhovna Rada Committee on Budget, noted, the budget for 2023 is very different from those which were in previous years. Its formation was influenced by a full-scale war.
The main budget expenditures
In the budget of a warring country, the priority is the cost of defense and people who should be supported by the state at a difficult moment. Therefore, in general, it was proposed to reduce costs by UAH 272.7 billion, in particular, UAH 11.6 billion less was allocated for the maintenance of government bodies.
The main expenses will be:
- Defense and security in total will receive more than a trillion hryvnia. This is 17.8% of GDP;
- Support for war veterans (housing, payments, rehabilitation) – UAH 6.8 billion;
- Fund for liquidation of the consequences of armed aggression – 19 billion;
- subsidies to compensate for losses of local budgets due to Russian aggression – 24 billion.
The government also provided increased spending on social protection, increasing salaries for educators and health workers, and maintaining scholarships. The medical field has not been neglected either. Thus, funds were allocated for:
- strengthening epidemiological surveillance,
- development of rehabilitation services and psychological support services,
- expanding the program of free distribution of medicines to patients, or with their minimum pay,
- subventions to local budgets for the construction of shelters in educational institutions and the renewal of the school bus fleet.
Another important nuance, as Yuri Aristov emphasized, is the preservation of loans for businesses under the 5-7-9 program and grants, which is almost 17.4 billion hryvnia.
Pay attention! Deputies can submit their proposals until October 1. Voting in the first reading is planned until October 20.
Where will the funds for expenses come from
Revenues in the 2023 budget are planned to be lower than expenses. They are planned to be pledged at the level of 1.28 trillion hryvnia, which is 3% less than they planned to receive this year (the budget for 2022 was drawn up even before the full-scale war).
The sources of these revenues will be< /strong>:
- Individual income tax – UAH 129 billion
- Corporate income tax – UAH 132 billion
- Rent payment – UAH 120.6 billion hryvnia
- Rent for forest resources – UAH 462 million
- Rent for water use – UAH 856.4 million
- Rent for extraction and use of subsoil – UAH 116.8 billion;
- Radio frequency rent – UAH 2.1 billion;
- Transportation rent – UAH 320.9 million;
- Excise tax – UAH 137.3 billion;
- VAT – UAH 596.3 billion
- Import duty – UAH 35.2 billion
- NPP and dividends – UAH 7.3 billion
- Gambling – UAH 1.59 billion
- Income from loans – UAH 1.9 billion
- Receipts from public institutions – UAH 45.5 billion
Unfortunately, these revenues do not reach the expenses that Ukraine will be forced to make, so there will be a budget deficit of $3 billion, or 1.29 trillion hryvnias a year. This is 20% of GDP. To cover the budget, Ukraine will resort to borrowing, 94% of which is planned for external resources.
As Prime Minister Denys Shmygal noted, already now more than a third of the budget is being helped by international allies, and Ukraine is making every effort so that the financial support of partners continues in 2023.
Macro forecast for the economy
According to People's Deputy Yaroslav Zheleznyak, the economy next year will grow by 4.6% in real terms and by 37% in nominal. The average salary will be about 18.5 thousand hryvnia, and inflation can reach 30%. The average annual dollar exchange rate is predicted to be around 42 hryvnia.
