Because of the ongoing war, Ukraine, which has been attacked by Russia, has passed a supplementary budget with additional spending of the equivalent of over ten billion euros, mainly for the military. According to local media reports, a clear majority in parliament voted for the law. Budget spending will thus rise by a good 13 percent to the equivalent of over 81 billion euros – a record figure for Ukraine.
The increase in spending is to be financed through higher tax revenues and loans from the European Union, among others. There are also to be savings in the social sector. Controversial tax increases are currently being discussed in parliament.
The budget changes were necessary in order to be able to pay soldiers, among other things, the front-line allowances for September. According to Prime Minister Denys Shmyhal, the original budget planning for 2024 only assumed fighting until the end of August. This was based on forecasts from the International Monetary Fund.
The budget has so far been supported by a slow devaluation permitted by the central bank. Since the beginning of the year, the national currency, the hryvnia, has depreciated by a good eight percent against the US dollar and almost ten percent against the euro. Aid money and loans arriving from abroad thus result in larger sums in hryvnia. The draft budget already plans for a further devaluation of around eight percent in 2025.
Ukraine has been fending off a Russian invasion for over two and a half years. Since the war began, Ukraine says it has received the equivalent of over 88 billion euros in financial aid from abroad.
© dpa-infocom, dpa:240918-930-235886/1
This is a message directly from the dpa news channel.
