All money is on weapons: how to finance defense in 2024

The project of the state budget for the next year, entered in the Cabinet of Ministers in the Verkhovna Rada, provides for the income part of 1. 7 trillion UAH. This is practically equal to all safety and defense costs. The experts surveyed by focus believe that this money may not be enough and the country's main estimate will be revised during 2024. The largest expenses in the project of the State Budget-2024, prepared by the Government, are security and defense. This area is planned to spend 1.

69 trillion UAH or 21. 6% of GDP, while the entire income part is 1. 7 trillion UAH. Focus writes about it in the new article "Purchase of drones and support of veterans: with which the state budget will reflect the aggression of the Russian Federation in 2024". According to the project of the State Budget-2024, the Ministry of Defense will send UAH 1164 billion.

In particular, at: at the Center for Public Finance Analysis and Public Administration of the Kiev School of Economics, the costs of the Ministry of Defense meet the indicators for January-August 2023, so "while maintaining trends in 2023, continuing active hostilities by the end of 2024 and in the absence of additional funding The Ministry of Defense budget will again require revision in the fall of 2024.

" The government proposes to the Council to allocate the following amounts for other power agencies: in addition, UAH 1. 5 billion will be allocated to the Ministry of Digital Transformation to support innovative protests for the Security and Defense Sector (Brave 1). In general, the budget project provides an increase in funding for the development of a defense-industrial complex, namely for the production of weapons, 7 times-up to UAH 55. 8 billion, as well as the purchase of drones-UAH 48.

1 billion. There are both external and internal risks of non-fulfillment of the revenue part of the budget-2024. In particular, the fall in business activity through the intensification of hostilities, as well as the rise in price of energy. "Ukraine remains a hostage to the terrible war that the aggressor country has begun. In current difficult circumstances, the economy of Ukraine is not able to generate sufficient revenues of the real sector to ensure that taxes are ensured .

Since Ukraine can only finance military needs with its own funds - external borrowing is not allowed to direct it, it is very important that the income forecast is possible. Meanwhile, there are some risks.

"Intensive continuation of the war can lead to an optimistic macroeconomic forecast due to a decrease in business activity, a fall in production of goods, a decrease in trade, which in turn - to a decrease in the creation of additional value, to an increase in inflation above the projected indicator (13. 8%) . Which, in turn, will affect tax revenues (income tax of enterprises, VAT), the volume of which may be less than is predicted, " - said at the KSE Center.

The greatest external risk is the increase in prices for goods, on which Ukraine is very dependent-energy resources, fuel and lubricants. Recall that in 2024 the indexation of pension accruals will be held under a new mechanism. In particular, all pensions without exception are indexed next year; The coefficients and points are introduced for fair accrual indexation, regardless of the time of retirement. The government also plans to increase the average pension to 6 thousand hryvnias.