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HomeWorldMilitary Road: Dream Burning...
May 27, 2025

Military Road: Dream Burning Budget deficit

By David
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    In Ukraine, again there is a threat of a budget hole from the growth of defense costs.

    Search for sources for its possible correction is currently underway, writes Ukrinform.

    Analysts evaluate the absence of funds in the state budget of Ukraine for 2025 in the range of 200-500 billion USA.

    From the uncertainty regarding the military assistance of the United States, Ukraine is forced to rely more on its financial capabilities when buying weapons and ammunition.

    In the first quarter of 2025, the tax revenue plan was exceeded by 46 billion UAH, and in April – another 10.4 billion USA.

    In April and May, the National Bank transferred the budget to 84.2 billion kayler, which exceeds 63.9 billion planned for the year.

    Experts of the World Bank and the IMF recommend taking into account the increase in VAT, although the probability of making such a decision is currently low.

    It is expected that one of the discussions in the framework of the work of the IMF mission, which currently works in Ukraine, will be the prospects for amending the state budget.

    The history of the issue

    After the analysis of financial reporting within four months and part of May, it turned out that the expenses of the army significantly exceeded the planned ones. This was announced by the First Deputy Chairman of the Financial Committee of Verkhovna Rada Yaroslav Zheleznyak.

    According to his estimates, he lacks 400 billion.

    The reason for an increase in a shortage is an increase in the cost of buying weapons, including from the delays in international assistance.

    According to the deputy, the government has already begun to spend funds planned at the end of the year, in particular for the salary of the military in November-December 2025. This money is redirected to the purchase of weapons, which creates “holes” in the budget, which should be closed urgently.

    Zheleznyak believes that budget changes can be made in July or August, as the IMF mission will work in Ukraine by the end of June. Prior to the decision of the Foundation Council Fund on the next trench for Ukraine, the government will not amend the budget so as not to violate the cooperation program.

    According to Zheleznyak, additional need is applied not only to the army. There is also a need to finance the treatment of patients with cancer, drugs and other social articles.

    At the same time, the deputy people assured that the salaries of military and military expenses would be paid completely, despite the lack of a budget.

    In turn, Alexei Kush, an expert of the analytical company “United Ukraine”, says that this year the military budget is 2 trillion UAH, of which 1.2 trillion is cash service of military personnel, and 737 billion UAH is on the purchase of weapons and military equipment, including 47 billion.

    These 2 Trillion UAH should collect the “rear economy”, but it is obvious that this year there will be at least 200 billion such internal resources, ”the expert says.

    According to him, the stronger the “rear economy” will be immersed in the crisis, the more this deficit will be. And with a wide lack of internal sources of financing and the “Economics of War” can turn into a tendency.

    Where will the authorities get money?

    The problem is that UAH 200 billion was covered with part of the excess of customs and taxes, the part is that they wanted to borrow more money in the domestic market.

    According to Zheleznyak, when it comes to 400 billion.

    At the same time, the Ukrainian authorities still hope for the aid of Western allies. In particular, it is expected that the EU will receive 12.5 billion euros in the framework of the program of the Ukrainian institution, which provides total funding for 50 billion euros for the period 2024–2027.

    Another source of funds is the IMF. Ukraine has reached the level of personnel in the seventh revision of the expanded financing program, which opens access to financing about $ 0.4 billion. He also plans to receive 50 billion dollars provided by income from frozen Russian assets.

    In addition, the government took measures to increase internal income. In particular, he increased taxes. Thus, wages from 1.5% to 5% were increased, and taxes for individual liters were increased.

    We recall that from February 2022, Ukraine has been sending almost all internal revenues from the state budget, this is more than 50% of the costs withdrawn at the Center for Economic Strategy (CES).

    At the same time, civil costs, such as social payments, salaries, pensions, cover external assistance, which in 2025 should be $ 38.4 billion.

    Most of the income this year Ukraine will receive from the G7 initiative of extraordinary acceleration of income for Ukraine (ERA) – a loan of $ 50 billion, which will completely cover the profit from frozen assets of the Russian Federation.

    If we manage to get away from the model “We pay for defense, and partners will help us with civilian spending in“ Europeans along with Ukrainians, they invest together in European security, financing the Ukrainian defense forces ”, this will significantly contribute to our financial stability for 2026 and improve puppies.

    Source: Racurs

    David
    David

    I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.

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