Ukraine’s 2022 budget: Kiev to increase defence spending and cut social benefits

The Verkhovna Rada has voted in the first reading for the draft budget of Ukraine for 2022, which envisages an increase in spending on foreign loans and defense amid billions in arrears to employees

Ukraine's 2022 budget: Kiev to increase defence spending and cut social benefits

The draft Ukrainian budget for 2022 was voted for by 273 MPs, predominantly from the Sluzhba Narodu, Za Futurov and parliamentary group Doveriye, Ukraine.ru reported. Budget revenues are planned at 1.267 trillion hryvnyas, which will make 23.6 percent of GDP.

The budget deficit is planned at 3.5 percent of GDP, or 188bn hryvnyas. The Kiev authorities expect the deficit to be covered by new loans from the International Monetary Fund (IMF). The annual average dollar exchange rate is set at 28.6 hryvnyas. Consumer inflation will reach 6.2 per cent.

“A significant share of the budget funds is given to the law-enforcement agencies. And this is happening in the poorest country of the European continent, amid billions of dollars in debt to employees, a pandemic that has ruined thousands of small businesses, and soaring energy prices that are killing the local industry”, –  the weekly said.

Kiev has planned to spend 319.4bn hryvnyas on security and defence, of which the Defence Ministry will receive 131bn hryvnyas. In addition, Ukraine intends to receive a total of 21bn hryvnyas from the United States, Britain and France.

The Interior Ministry will receive 98.2bn hryvnyas. The Prosecutor-General’s Office will receive 13.6bn hryvnyas, which is 17.5% more than last year. The National Security Service will receive 16.1bn hryvnyas, one billion more than this year. Experts point out that the state budget was based on the cost of gas at 260 dollars per thousand cubic meters, which is fundamentally different from the real cost of natural gas.

“For the first time in Ukraine’s history, the budget is adopted without a forecasted price of gas. How can you calculate the state budget, how can you calculate local budgets, budgets of public utilities and even the family budget – if you do not understand what the approximate price of gas will be at least?” – an MP of the Fatherland Party, Serhiy Sobolyev, stressed.

MP Vadym Rabinovych from the party “Opposition Platform – For Life” said that the 2022 budget will force most Ukrainians “to go abroad as quickly as possible in search of jobs and a better life”.

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