The Ukrainian government has approved the 2025 state budget draft, which will soon be submitted to the Verkhovna Rada for consideration. The budget draft has been prepared on time and is balanced.
Read more: Extended deadline for applications for one-time financial assistance for purchasing solid fuel
Key provisions of the budget draft
Finance Minister Serhiy Marchenko emphasized during a Cabinet meeting that funding for the security and defense sector remains a key priority for the 2025 budget. Expenditures to ensure effective resistance against the enemy will increase, and all internal revenues and borrowings will be directed towards the needs of Ukraine’s defenders. Additionally, assistance to citizens, support for veterans, and social services are also a focus for the government in the coming year.
Revenue and expenditures
The general fund revenues for the state budget next year (excluding official transfers and grants) are projected to be UAH 2,007.4 billion, while general fund expenditures amount to UAH 3,643.6 billion.
The financial resource for the security and defense sector in 2025 will increase to UAH 2,223 billion, which represents 26.3% of the projected GDP. These expenditures include monetary, material, and food support for the military, procurement of weapons and equipment, and support for the defense-industrial complex.
Social protection
Social protection remains an important priority. Assistance to war veterans will be maintained at the current year’s level, including funding for support programs. Funds for internally displaced persons, individuals with disabilities, benefits, and subsidies, as well as transfers to the Pension Fund for pension payments, will be fully accounted for. Additionally, pensions are planned to be indexed starting March 1, 2025.
UAH 419.2 billion is allocated to support socially vulnerable citizens: UAH 237.9 billion for pension payments, UAH 127.9 billion for aid to low-income families and individuals in difficult life circumstances, and UAH 42.3 billion for benefits and subsidies. Funds are also planned for supporting people with disabilities and families with children.
Healthcare and education
Expenditures for healthcare will amount to UAH 210.7 billion, including funding for the medical guarantee program and providing hospitals with medicines and medical supplies. Priorities include creating a unified medical space and providing housing for healthcare workers in rural areas.
For education, UAH 169.3 billion is allocated, covering teacher salaries, grants for higher education, provision of textbooks, and healthy student nutrition. Additionally, UAH 9.6 billion is planned for cultural development, UAH 4.0 billion for digital transformation, including funding for innovative projects for the security and defense sector, and UAH 14.0 billion for scientific research in the defense-industrial complex, energy, and energy efficiency.
Business and regional support
For business support, UAH 18 billion is allocated to the Entrepreneurship Development Fund for providing preferential loans under the “5-7-9%” program, and UAH 1.4 billion is allocated for business grants.
Regional support includes UAH 12.2 billion in subsidies to compensate for tariff differences to ensure access to communal services. Additionally, UAH 9.4 billion will be directed towards providing housing through the Ukrfinzhytlo program.
Humanitarian demining and environmental projects
UAH 1 billion is planned for humanitarian demining to ensure safety in areas affected by combat. Also, UAH 1.75 billion is allocated to the State Fund for Decarbonization and Energy Efficiency Transformation, aimed at reducing carbon emissions and enhancing energy efficiency.
Local budgets and reserve fund
An additional UAH 51.2 billion is planned as a grant to local budgets to support the functions of local self-government bodies in liberated territories, which will help restore economic activity.
To respond to unforeseen events, a reserve fund of UAH 43.9 billion is established. Social standards, including the minimum wage and living wage, will remain at the December 2024 level. The budget also includes a new model for managing public investment projects with a planned allocation of UAH 25 billion for 2025.
Financing and borrowing
The 2025 state budget financing forecast includes a reduction in the budget deficit to 19.4% of GDP (compared to 20.6% in 2024). State borrowings for the general fund are planned at UAH 2,237.6 billion, including UAH 579.2 billion in domestic and UAH 1,658.4 billion in external borrowings. Currently, not all external borrowings have been confirmed by international partners, which requires further diligent and persistent work.
This budget draft reflects a comprehensive approach to addressing defense needs, social protection, and supporting economic development in Ukraine for 2025.
