The Accounting Chamber of Ukraine has published its findings on the execution of the state budget for the first quarter of 2025. Auditors pointed out significant risks that could affect the country’s economic stability. Among the main challenges are the reduction in the number of individual entrepreneurs, instability in the currency market, and increased inflationary pressure.
This is reported by Finway
Risks to Economic Development and Budget Execution
Head of the Accounting Chamber Olga Pishchanska noted that the execution of the state budget is complicated by the consequences of the war, particularly issues with logistics, population migration, and infrastructure destruction.
“The execution of the budget remains complicated due to the war: problems with logistics, population migration, and destroyed infrastructure.”
As a result of the first quarter of 2025, real GDP grew by only 0.5% against an annual forecast of 2.7%. This creates risks regarding the execution of the budget’s revenue part. Key reasons for the economic slowdown included an 8.7% decrease in exports, particularly a drop in the sales of food products and iron ore. At the same time, the share of high value-added product exports noticeably increased to 15.2%.
Structure of Expenditures and State Debt
In the first quarter of the current year, state expenditures reached 1.2 trillion UAH, which is 38.5% higher than last year’s figure for the same period. Of this amount, over 73% (specifically 73.5%) was allocated to ensure the defense and security sector. Meanwhile, Ukraine’s state debt increased by 2% and amounts to 7.1 trillion UAH. One-sixth of all state budget revenues was spent on servicing the debt, but these expenses were 15% lower than planned.