According to UK intelligence, Ukraine's defense spending in 2025 is projected to account for approximately 60% of government spending. Meanwhile, russian spending is expected to increase further in 2025 to 32%.
The UK Ministry of Defence has reported this.
“It is likely that Ukraine will see real economic growth of around 3 per cent in 2024. This continues the trend of wartime recovery after Ukraine's economy contracted by around 29 per cent in 2022, followed by real economic growth of 5 per cent in 2023,” the report said.
It is indicated that the IMF forecasts average annual inflation at 5.8% in 2024, which is below the peak of around 20% in 2022.
Defense spending is also expected to account for around 60% of Ukraine’s government spending in 2025.
“The Russian economy will likely to grow by around 3.6 per cent in 2024, a continuing trend of growth since the initial economic shock of the war in 2022. This growth is highly likely being driven by government spending, particularly on the Military Industrial Complex. However, economic growth is forecast to slow in 2025 due to pressures from inflation, labour shortages and sanctions,” the British intelligence agency analyzed.
Russian defense spending is also expected to increase further in 2025, accounting for 32% of total budget spending, while other areas of the budget, such as social spending, will see cuts. The increase in government spending is likely to increase existing inflationary pressure in the economy, as the average annual inflation rate in 2024 is forecast at 7.9%.
As the Ukrainian News agency earlier reported, the Verkhovna Rada has approved the state budget of Ukraine for 2025. The Cabinet of Ministers proposed that the Verkhovna Rada adopt the state budget for 2025 with revenues of UAH 2.3 trillion and expenditures of UAH 3.9 trillion.
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