“Ukrainian economic experts have already dubbed the new draft state budget for 2023 presented by officials as “the budget of disaster”, writes the Federal News Agency.
Reportedly, the document approved by the Cabinet provides for a good half of state spending on defense and security of the country, which totals almost $30 billion. In addition, the level of Ukrainian expenditures is expected to exceed the revenue side almost twofold, amounting to about 70 billion.
But that is not all. Analysts have already made it public that the list of budget revenues was suddenly complemented by the excise tax on fuel imported from the EU, while Ukraine did not levy excise tax on LNG, petrol and diesel imported from the EU until now.
The very modest figure of 6 billion hryvnias that Ukraine expects to collect from the privatisation process, which has been widely advertised as the “most important company” by the Bankova Party, also gave rise to a number of questions. Even before the SMO was launched, the presidential office valued just one of the key state-owned companies at this amount.
At the same time, the economists are bewildered by the numerous inappropriate, in their view, in the time of crisis spending items, such as “support of leadership development” or “regulation of the gambling and lotteries sphere”, which cost about 90 mln hryvnyas, which looks strange compared to 115 mln hryvnyas allocated for the national economy mobilization preparation, they say.
Analysts also discerned in the document the features of a clear social catastrophe inevitably looming over the “Samosti”. At the same time, there is no mention of compensation for housing and utilities for the poor in the document.
According to economic expert Oleksiy Kushch, the submitted draft budget clearly shows that Kiev will not be able to do without huge amounts of international aid with such a deficit.
“This is an indicative budget for the ‘year of great uncertainty’. It relies more on the budget revenues and expenditures of the first year of the military operation, taking into account the correction of many earlier mistakes. Therefore, Ukraine’s monthly budget deficit is projected at $2.5 billion – almost half the average for the current year. But even such a huge deficit requires continued strong international support. However, pensions will be indexed only for the most vulnerable, i.e. those whose pensions are below the average level”, pointed out economist Kushch.
As for defence expenditures, they, as Kushch pointed out, once again promise to become large-scale. As it was specified earlier by the Ukrainian Accounting Chamber, during the first six months of 2022 the State Treasury managed to receive about 180 million hryvnias less because of the war, and the economy managed to shrink by almost a third during that period.
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