Defense and roads: Rada adopted the State Budget-2023

The minimum wage and the subsistence minimum remain at the same level, and the rate laid out in the budget is 42.2 Hryvnia per dollar.

The Verkhovna Rada in the second reading and as a whole adopted the state budget for 2023. As expected, the main expenditure of Ukraine is defense. At the same time, Parliament decided to support the proposal of the Cabinet of Ministers to increase funding for road construction and the creation of the Recovery Fund.

It should be noted that the draft state budget itself is finalized and communicated to the International Monetary Fund after the first reading. In the final document, it is proposed not to change the size of the minimum wage and the living wage. At the same time, it is expected that if martial law is lifted in 2023, the government will increase the cost of living.

The 2023 state budget set a historic record for defense spending and speed of adoption.

“This is a record for the earliest adoption of the budget in the history of Ukraine. Now we hope that international partners will appreciate our promptness and fully finance the promised, also a record, $38 billion deficit ,” said MP Yaroslav Zheleznyak.

Basic numbers

In the state budget-2023, revenues amount to 1 trillion 329.3 billion hryvnias (for the general fund – 1 trillion 173.1 billion hryvnias), and expenses – 2 trillion 580.7 billion hryvnias (for the general fund – 2 trillion 296.5 billion hryvnias) The maximum amount of the state budget deficit is UAH 1 trillion 296.5 billion (for the general fund – UAH 1 trillion 124.6 billion). It is expected that in 2023 the maximum amount of public debt will be UAH 6 trillion 422.7 billion and will exceed the nominal GDP.

GDP and inflation

It is expected that by 2023 the nominal gross domestic product of Ukraine will reach 6 trillion 279.3 billion hryvnias. Real GDP will increase by 3.2% after declining by 32.0% in 2022.
Consumer price growth in 2023 is expected to be 28.0% after inflation of 29.3% in 2022 (December to December). So, within two years, the Hryvnia will lose almost two-thirds of its value.

dollar exchange rate

The state budget for 2023 includes a rate of 42.2 hryvnia per dollar. So, a cash dollar can increase in price to 10 hryvnias, we note that in 2022 the rate is laid at 32.3 hryvnias. In addition, it is predicted that by the end of 2023 the exchange rate will increase to UAH 45.8. At the same time, the budget forecast in no way influences the decision of the NBU on the official rate.

Salaries of Ukrainians

The Parliament decided that in 2023 the minimum wage will not increase and will remain at the level of 2022 – UAH 6,700 per month. At the same time, representatives expect that real wages will grow by 1.4%. At the same time, due to high inflation of 20.5% on average for 2022, wages adjusted for the consumer price index will decrease by 16.9%.

In 2023, the average salary will increase to UAH 18,261. However, due to inflation of 28.4%, real wages will only increase by 1.4%. The 2023 budget also does not provide for a salary increase for social workers.

The document adopted today provides for the financing of housing subsidies in the amount of UAH 37.9 billion, which is 9.2% less than in 2022.

Living wage and minimum pension

In 2023, the subsistence minimum will not increase and will reach UAH 2,589 per month per person, and for the main social and demographic groups of the population:

• children under 6 years old – 2272 hryvnias;

• children aged 6 to 18 years – 2833 hryvnias;

• able-bodied people – 2684 hryvnias;

• able-bodied persons used to determine the basic salary of a judge – UAH 2,102;

• competent persons, used to determine official salaries of employees of other state bodies, whose salaries are regulated by special laws, as well as employees of tax and customs authorities – 2,102 hryvnias;

• competent persons, used to determine the official salary of the prosecutor of the district prosecutor’s office – 1600 Hryvnia;

• people who have lost their ability to work (minimum pension) – 2093 Hryvnia.

Security and defense spending

The state budget provides 1 trillion 141.1 billion hryvnias for national security and defense (general fund – 1 trillion 6.1 billion hryvnias, special fund – 115.0 billion hryvnias, state guarantees – up to 20 billion hryvnias) or 18.2% of GDP.

New item of expenditure

The state budget also includes 35.5 billion hryvnias in the Fund for Eliminating the Consequences of Russia’s Armed Aggression (a new expenditure item in the budget of Ukraine). Money from the Fund should be used for the construction, reconstruction, repair of Ukrainian houses and other facilities that suffered as a result of the military operations of the Russian Federation, as well as the purchase of finished housing and school buses.

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