The budget projects minimal economic growth and a freeze on social benefits.
Budget Overview
- Revenue and Expenditure: The budget anticipates revenues of 2 trillion 336 billion hryvnias and expenditures of 3 trillion 938 billion hryvnias, resulting in a deficit of 1 trillion 640.6 billion hryvnias. The deficit is expected to be covered mostly by international aid.
- Defense and Security: The primary focus is on the defense and security sector, with an allocation of 1 trillion 223 billion hryvnias, accounting for 26.3% of GDP. This includes increased spending to counter ongoing threats and ensure national security.
Economic Projections
- GDP Growth: The economy is expected to grow by 2.7% in 2025, a slowdown from the 3.5% projected growth in 2024 and 5.3% in 2023.
- Inflation: Consumer price growth is anticipated to accelerate to 9.5% in 2025, influenced by rising raw material costs, wage increases, and gradual devaluation of the hryvnia.
- Currency Exchange Rate: The government forecasts the dollar to rise to 45.0 hryvnias in 2025, with an average exchange rate of 40.8 hryvnias to the dollar for 2024. The exchange rate is expected to stabilize around 41 hryvnias per dollar if hostilities cease.
Social Benefits
- Minimum Wage: The minimum wage is set to remain unchanged in 2025 at 8,000 hryvnias per month, or 48 hryvnias per hour.
- Living Wage and Pensions: The living wage will remain at 2,920 hryvnias per month, with variations for different demographic groups. The minimum pension will be set at 2,361 hryvnias.
- Average Salary and Employment: The average salary is expected to increase by 18.5% to 24,389 hryvnias in 2025. The government predicts a gradual reduction in the unemployment rate to 17.7% due to increased economic activity and job creation.
Taxation and Subsidies
- Tax Increases: Proposed tax amendments include an increase in the military levy rate from 1.5% to 5%, expected to generate an additional 107.7 billion hryvnias.
- Subsidies: 42.3 billion hryvnias are allocated for housing subsidies and benefits, intended to support 2.8 million households. This represents a 15.2% reduction in the total subsidy budget compared to the previous year.
The draft budget for 2025 will undergo three readings in the Verkhovna Rada and is expected to be adopted by December 1.
