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Parliament Adopted State Budget 2025: The Defense of the Country will be Ensured

19 November 2024

Today, on November 19, the Parliament of Ukraine approved the draft Law of Ukraine “On the State Budget of Ukraine for 2025” in its second reading and as a whole. The budget is aimed at ensuring a comprehensive approach to supporting priority sectors, developing critical industries, and restoring the economy during wartime.

"Adopting the State Budget for 2025 is a well-thought-out strategic decision based on clear priorities: national defense, support for citizens, and economic recovery. Importantly, the budget addresses the real needs of today, focusing on ensuring long-term resilience and strengthening economic stability in the challenging conditions of war," said Ukraine’s Minister of Finance, Serhiy Marchenko, during his address to the Verkhovna Rada.

Key Budget Figures

  • General Fund Revenues (excluding grants and international aid): UAH 2.05 trillion.
  • General Fund Expenditures: UAH 3.6 trillion.

Priority #1: Security and Defense

In 2025, 26.3% of the country's GDP will be allocated to Security and Defense, a top priority. Expenditures will increase to UAH 2.23 trillion, UAH 47.6 billion more than the revised 2024 plan. This boost aims to strengthen Ukraine's defense capabilities.

Specific Allocations:

  • Military Salaries: UAH 1.16 trillion, UAH 10 billion more than in 2024.
  • Weapons and Military Equipment: UAH 739 billion, an increase of UAH 34.1 billion. This funding will enable the procurement of advanced weapon systems and technological upgrades for the army, essential for effective military operations.
  • Defense Industry Development: Funding for the Ministry of Strategic Industries will rise to UAH 55.1 billion, up by UAH 15.3 billion from 2024. These funds will support technological upgrades of production facilities.
  • Drone Procurement: UAH 46.9 billion, an increase of UAH 3.6 billion. This will provide the army with modern drones for reconnaissance and combat operations.

Social and Economic Recovery

The 2025 State Budget also is aimed at meeting social and humanitarian needs and rebuilding the economy.

Public Investment Management (PIM)

The PIM system, introduced with the World Bank support, ensures more effective use of public funds by targeting strategic projects. A Unified Project Portfolio includes 787 projects worth UAH 2.6 trillion. In 2025:

  • UAH 224.2 billion will be allocated to projects such as:
    • UAH 115 billion under state guarantees for critical infrastructure restoration (e.g., transportation and energy facilities).
    • UAH 71.8 billion from international financial institutions for projects in transport, industry, healthcare, education, and energy.
    • UAH 36.4 billion from the general fund for social and infrastructure projects, including rebuilding schools, hospitals, and water systems in affected regions.

This approach facilitates not only recovery but also modernization, creating a foundation for future economic growth.

Key Sectors and Allocations

Social Protection

  • Total Funding: UAH 420.9 billion.
  • Pension Fund Transfers: UAH 236.9 billion.
  • Subsidies and Benefits: UAH 42.3 billion.
  • Social Housing and Services: UAH 1.1 billion under PIM.

Support for Veterans

  • Total Funding: UAH 10.5 billion, including:
    • UAH 2.9 billion for veteran support specialists.
    • UAH 1.7 billion for rehabilitation and professional adaptation.
    • UAH 348 million for programs by the Ukrainian Veterans’ Fund.
    • An additional UAH 4.9 billion under PIM for public investment projects, including veteran housing.

Education

  • Total Allocation: UAH 198.9 billion, including:
    • UAH 103.2 billion for teacher salaries.
    • UAH 12 billion for teacher bonuses.
    • UAH 1.4 billion for textbooks.
    • UAH 28 billion for higher education grants.
    • UAH 11.8 billion under PIM for modernizing educational facilities and building shelters.

Healthcare

  • Total Funding: UAH 217 billion, including:
    • UAH 175.5 billion for medical guarantees programs.
    • UAH 11.8 billion for medicines and medical supplies.
    • UAH 5.6 billion under PIM for upgrading healthcare facilities and establishing rehabilitation centers.

Local Government Support

  • Local budgets will grow by 15% compared to 2024, from UAH 285.1 billion to UAH 327.7 billion.
  • Key growth drivers include an increase in personal income tax revenues (from UAH 235.4 billion to UAH 280.9 billion) and additional subventions for de-occupied territories (UAH 36.5 billion).

Culture and Media

  • Total Allocation: UAH 10.3 billion, including:
    • UAH 2 billion for cultural heritage preservation and support for national theaters.
    • UAH 4.1 billion for strategic communications and information security.

Science

  • Funding: UAH 14.5 billion for research projects, scientific infrastructure modernization, and defense-related innovations.

Digital Transformation

  • Total Allocation: UAH 4 billion for e-governance, expanding the “Diia” portal, and implementing advanced technologies in security.

Sports

  • Funding: UAH 5.7 billion for Olympic and Paralympic programs, physical education development, and athlete preparation for international competitions.

Business Support

  • Affordable Loans Program (“5-7-9%”): UAH 18 billion for small and medium-sized businesses.
  • Business Grants: UAH 1.4 billion.
  • Innovation Development Fund: UAH 3 billion.

The 2025 state budget reflects a comprehensive strategy to balance immediate wartime needs with long-term economic stability and social protection.

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