KYIV – The Cabinet of Ministers of Ukraine approved the draft budget for 2024
- revenue – 1 trillion 560 billion UAH;
- expenses of the general fund – 3 trillion 108 billion UAH;
- deficit – 1.531 trillion UAH;
- defense and security – more than half of the budget 1 trillion 685 billion UAH (113 billion UAH more than this year);
- social sphere – 469 billion UAH;
- medicine and education – 202 billion UAH and 179 billion UAH, respectively;
- support for veterans – 14.3 billion UAH (2 times more than now);
- economic recovery – no increase is expected.
From January 1, 2024, the minimum wage: 7100 hryvnia, from April 1 – 8000 hryvnia. From January 1, 2024, the cost of living per person per month is 2920 hryvnia.
The deficit is set at the level of UAH 1.6 trillion, which is about 20.4% of the projected GDP. The government will finance the budget deficit through the placement of OVDP bonds (for UAH 421.6 billion) and foreign borrowing (UAH 1.77 trillion). In total, in 2024, Ukraine will need almost $43 billion in external financing (grants and loans).
Here is a summary for you to think about the figures:
|UAH trln||% from Expenses Budget||Exchange rate UAH/USD||USD bln||% from Expenses Budget|
|Defense and security||1.685||54.2%||44.34||54.2%|
As you can see Ukraine as a state does not have money to continue the war. The deficit of the budget is 50% – USD 40 bln. In 2022 and 2023 the deficits were covered by the issuance of bonds, grants and financial assistance from the USA and the EU.
As you look at the budget, just ask yourself — how the country can lead the war and survive when an estimated 16 mln people have already left the country and the deficit is 50% of the budget?
The cost of war per year is estimated at USD 40.74 bln. The country will ask this money from the USA and the EU countries. In addition to that, the Ukrainian finance minister and the Prime minister will issue local bonds denominated in UAH applying further pressure on the local currency and the banking sector. Issuance of local bonds and carouseling the bonds in local state owned banks creates additional pressure on the stability of local currency that will result in devaluation. Think about Argentina case when looking at the numbers.
Overall, we can conclude the budget accepted by the Parliament of Ukraine is a budget of War, Debt, Death and Dead. Fail. It’s not Default caused by the War. It’s a Failure of the State.
What’s more intriguing is a question — how will the government pay the families who lost their fathers/sons? 15 mln UAH per killed person? That’s USD 395 thousand per dead person killed in action. Though the figures of Ukrainians killed in action is classified we can estimate the quantity of money required to pay to the families by looking at the quantity of dead Russian soldiers killed in the war – 270 thousand Russians are estimated to be killed in action as of September 2023 by the Ukrainian government. That means that the quantity of Ukrainians killed in the war is in the range of 135 thousand (50%) or up to approximately the same quantity of Russians killed. Simple math tells us that even if you take 135 thousand of dead Ukrainians and multiply by 395 thousand USD required to be paid to the Ukrainian families we arrive to the astounding figure of USD 53 bln.
That leads us to the conclusion that the government doesn’t forecast to pay that amount of money to the Ukrainian families. The families should be aware of the failure of the state and not send their fathers and sons to the war.
This is a war of dead and death.
We urge anyone who reads this article to help stop the war if you can help.
|394,737||USD thousand payment to the family per 1 dead Ukrainian soldier|
|135,000.00||Estimated quantity Ukrainian soldiers dead|
|53,289,473,684||Estimated amount of budget to be paid to the families|