This week, the Verkhovna Rada approved the national budget for 2025 with record figures – 3.94 trillion hryvnias. In comparison, the budget for 2021 was 1 trillion 328 billion hryvnias. This is already the third budget during wartime, and the priorities reflect that: enhancing security and defense, social protection for citizens, and supporting regions. Reported by TSN. This information is provided by Kontrakty.UA.
For more details, see the report from TSN Week.
Defense Sector
Next year's military budget will be twice as large as the amount the country functioned on during peacetime – 2.22 trillion hryvnias, accounting for 56% of all expenditures in 2025.
In the defense sector, additional funds will be allocated for the purchase of weapons and military equipment – 739 billion UAH (+34.1 billion compared to 2024). For the first time, our international partners are allocating funds for weapons. In particular, Denmark is earmarking 130 million euros for the production of missiles and drones in Ukraine. Sweden will soon announce significant funding for the development and production of our own long-range weapons.
The budget also includes the first international funds that can be spent on defense needs: 2 billion dollars or 90 billion UAH in credit funds will come to the state budget from the United Kingdom specifically for covering military expenditures. The Ministry of Defense will direct these funds towards the purchase of weapons and ammunition.
It is likely that the defense expenditure figure is not final. In previous years, the government and parliament have repeatedly increased these expenses. Therefore, it is possible that this may happen again in 2025.
Social Sector
Approximately 421 billion hryvnias will be allocated to the social sector. This is nearly 50 billion less than this year.
In particular, the government has found about 10 billion UAH for the "Zelensky thousand" payments. These funds will come from the remaining balances in the account of the Social Insurance Fund for unemployment – 5 billion hryvnias. According to the government, the winter payment will be received by no more than 15 million citizens.
For education, 199 billion hryvnias will be allocated. Ensuring the safety of students is one of the priorities. Therefore, additional funds have been allocated in the budget for shelters and buses for children.
Additionally, 12 billion UAH has been allocated for teacher bonuses. Starting from January 2025, the payment will amount to 1,300 hryvnias, and from September it will increase to 2,600.
217 billion UAH will be allocated for the healthcare sector, which is 12 billion more than in 2024.
Assistance to regions will also see a slight increase – to 328 billion hryvnias.
Exchange Rate, Inflation, GDP Growth
In 2025, the exchange rate for 1 US dollar will be set at 45 hryvnias. This is the average annual figure, which is 4 hryvnias more than this year's.
Inflation, or price growth, is projected at 9.5%.
GDP growth is estimated at 2.7%, which is lower than this year.
The average salary is expected to rise from 20,581 hryvnias to 24,389. However, the minimum wage will not increase – it will remain at 8,000 hryvnias, as will the subsistence minimum for working-age individuals – 3,028 hryvnias.
Following the scandal involving fake pensions, a decision was made not to increase salaries for prosecutors. The special subsistence minimum, which directly affects the determination of prosecutors' salaries, will remain at 1,600 UAH. This means that in 2025, their salaries will not increase by a single hryvnia, saving about 1.2 billion hryvnias.
One of the main intrigues is the tax increase law, which has not yet been signed by the President, but the "imaginary" taxes collected, including a 5% military tax, have already been allocated 141 billion UAH – primarily for financing the security and defense sector.
However, of the nearly 4 trillion hryvnias allocated in the budget, Ukraine has earned only 2.2 trillion – all of which will go towards the war. The country will survive solely on the assistance from allies, with over 38 billion dollars expected next year.
It is worth noting that the Biden administration has made the first step to cancel about $4.6 billion of Ukraine's debt, which it was supposed to repay for issued loans, but the decision now rests with Congress.