Ukraine’s parliament approved the state budget for the year 2022 on Dec. 2.
A total of 268 of Ukraine’s 423 lawmakers voted for the bill, which sets planned expenditures for the year at $55 billion and projected revenues at $48.5 billion.
The projected budget deficit for 2022 is 3.5% of the GDP, a reduction from the 5.5% deficit projected for 2021. This was one of the benchmarks laid out by the International Monetary Fund to extend its $5 billion loan program.
The IMF approved the latest $700 million loan tranche on Nov. 22. The deal was originally due to be approved in August, but was postponed by the lender due to skepticism about Ukraine’s progress with reforms.
The deficit target has been met primarily by raising taxes. On Nov. 30, parliament passed a bill that institutes a new system for calculating iron ore mining rents, triples carbon taxes, and adds a new 18% levy on sales of agricultural produce.
The website of President Volodymyr Zelensky’s ruling Servant of the People faction, which has 242 seats in parliament, declared that the upcoming year’s budget contains Ukraine’s largest ever increase in spending on new projects and improvements. Capital expenditure will rise by $1.1 billion to a total of $5.1 billion in 2022.
Defense spending will remain at 6% of GDP against the backdrop of Russia massing over 93,000 troops on Ukraine’s border. Ukrainian and foreign intelligence services have said Russia may launch a large invasion in January or February 2022.