The Ukrainian Parliament has adopted the draft Law of Ukraine “On the State Budget of Ukraine for 2025” in its second reading and as a whole. The budget, aimed at supporting priority sectors, developing critically important industries, and restoring the economy amid the ongoing war, is designed to ensure a comprehensive approach to managing public finances.
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Finance Minister: A Strategic Decision for Long-Term Stability
Commenting on the adoption of the budget, Minister of Finance of Ukraine Serhiy Marchenko emphasized that this is “a balanced strategic decision, based on clear priorities: the defense of the state, support for citizens, and economic recovery.” According to him, the budget is focused on the real needs of the present and aims to strengthen the country’s economic stability in the context of war.
2025 Budget Revenues and Expenditures
According to the budget proposal, revenues for the general fund (excluding grants and international aid) are projected at 2.05 trillion UAH, while expenditures are planned at 3.6 trillion UAH.
Budget Priorities: Security and Defense
The primary priority of the 2025 budget is security and defense. Expenditures in these areas will account for 26.3% of the country’s GDP, or 2.23 trillion UAH, which is an increase of 47.6 billion UAH compared to the revised 2024 plan. Specifically, 1.16 trillion UAH will be allocated for military salaries, which is 10 billion UAH more than last year. Additionally, spending on weapons and military equipment will increase to 739 billion UAH, which is 34.1 billion UAH more than in 2024. This funding will ensure the purchase of advanced weaponry and modernize the army, which is essential for effective combat operations.
Special attention is given to the development of the defense industry. The Ministry of Strategic Industries (Minstratprom) will receive 55.1 billion UAH to modernize the defense-industrial complex, which will enhance Ukraine’s defense capabilities. There will also be an increase in funding for unmanned aerial systems (UAVs), with 46.9 billion UAH allocated in 2025, which is 3.6 billion UAH more than in 2024.
Supporting Economic Recovery: Public Investment Management (PIM) System
One of the innovations in the 2025 budget is the Public Investment Management (PIM) system, introduced with the support of the World Bank. This system will allow for more efficient use of public funds, directing them to priority projects that align with the country’s strategic goals. Through PIM, the government will ensure transparency in expenditures and improve the quality of investments in critical sectors, helping accelerate infrastructure recovery.
Within the PIM framework, a Unified Project Portfolio has been created, which includes 787 projects totaling 2.6 trillion UAH. For 2025, 224.2 billion UAH is allocated for these projects. Specifically, 115 billion UAH will be mobilized under state guarantees for the reconstruction of critical infrastructure, such as transportation and energy facilities. Additionally, 71.8 billion UAH will come from international financial organizations in the form of loans and grants, enabling funding for projects in transportation, industry, healthcare, education, and energy. Finally, 36.4 billion UAH will be allocated from the general fund for key social and infrastructure projects, including the restoration of schools, hospitals, and water supply systems in the affected regions.
Social Protection and Citizen Support
A total of 420.9 billion UAH will be allocated for social protection, including support for pensioners (with pension indexation planned for March 1, 2025), low-income families, and people with disabilities. Transfers to the Pension Fund will amount to 236.9 billion UAH, while payments for benefits and subsidies will total 42.3 billion UAH. Additional funding for social programs within public investments (PIM) will be 1.1 billion UAH, including housing construction for large families and the development of social services.
Veterans’ Support and Education
In 2025, 10.5 billion UAH will be allocated for veterans’ support. Of this, 2.9 billion UAH will be used to fund professional support specialists, 1.7 billion UAH for mental, physical, and psychological rehabilitation and professional adaptation of veterans, and 348 million UAH for the Ukrainian Veterans Fund programs. An additional 4.9 billion UAH is allocated within PIM for public investment projects, including housing construction for veterans.
For education, the budget allocates 198.9 billion UAH. This will cover teacher salaries (103.2 billion UAH), bonuses for teachers (12 billion UAH), textbook purchases (1.4 billion UAH), and higher education grants (28 billion UAH). An additional 11.8 billion UAH is earmarked for the modernization and improvement of educational institutions’ infrastructure, including the creation of shelters for student safety.
Healthcare and Social Services
Healthcare financing will amount to 217 billion UAH, including 175.5 billion UAH for the Medical Guarantee Program and 11.8 billion UAH for the purchase of medicines and medical supplies. Within PIM, 5.6 billion UAH will be allocated to update medical facilities, acquire equipment, and create rehabilitation centers.
Local Government Support and Business Development
In 2025, local budgets will grow by 15% compared to 2024, increasing from 285.1 billion UAH to 327.7 billion UAH. The main increase will come from personal income tax (PIT) revenues, which will rise from 235.4 billion UAH to 280.9 billion UAH. An additional subsidy for local budgets will increase to 36.5 billion UAH, including support for de-occupied territories.
A base subsidy will rise to 25.5 billion UAH, and the introduction of reverse subsidies will allow for more efficient resource distribution.
In addition, the state budget will allocate 4.0 billion UAH for compensation for damaged or destroyed housing due to hostilities and 1.0 billion UAH for the State Regional Development Fund (SRDF).
Culture and Media Space
Support for culture and the media will receive 10.3 billion UAH, which will fund the preservation of cultural heritage, support for national theaters and concert organizations (2 billion UAH), and projects for the development of strategic communications and information security (4.1 billion UAH).
Science
Funding for science will total 14.5 billion UAH, which will be used to support research projects, modernize scientific infrastructure, and provide grants for priority research. Special attention will be given to developments in the defense industry and energy security.
Digital Transformation
The digital transformation of priority sectors will receive 4 billion UAH. Key projects will include the development of e-governance, expanding the capabilities of the “Diia” portal, innovative solutions to enhance government services, and the implementation of cutting-edge technologies in the security sector.
Sports
The sports sector will receive 5.7 billion UAH. This funding will support the Olympic and Paralympic movements, the development of physical education, and the preparation of athletes for international competitions.
Business Support
For entrepreneurship, 18 billion UAH will be allocated within the “5-7-9%” program. This funding will provide affordable credit for small and medium-sized businesses, helping to stimulate economic recovery and preserve jobs. Additionally, 1.4 billion UAH will be allocated for business grants, and 3 billion UAH will go to the Innovation Development Fund.
The State Budget of Ukraine for 2025 represents a crucial step toward stability and recovery in the context of war. With strategic priorities such as security and defense, economic recovery, and social programs, the budget will help Ukraine move forward, even in the most challenging conditions.
