Ukraine Plans Defense Budget Growth

Ukrainian MiG-29, Seen during Clear Sky 2018 Military Exercise. Source: U.S. Air National Guard

The Ukrainian defense budget will increase next year.

In a statement this week, Ukrainian Defense Minister Andriy Zahorodniuk said that the combined defense and security budget for 2020 will total UAH245.8 billion, or around 5.45 percent of GDP. He added that around 3 percent of GDP – UAH136 billion – would be specified for defense purposes, though he noted that the Ministry of Defense’s budget will come to UAH116.1 billion, Ukrinform reported.

The budget for the Defense Ministry calls for an increase of about 12.8 percent from the previous year.

RFE/RL reported that the budget expects an exchange rate of about 27 hryvnias to the dollar. In dollar terms, the combined budget of UAH245.8 billion will thus be about $9.1 billion. The budget for the Defense Ministry, at UAH116.1 billion, will equate to about $4.3 billion.

The upcoming budget will be the first full-year budget under the administration of President Volodymyr Zelensky, who was elected earlier in 2019. A draft budget, unveiled in September, had initially planned for an essentially stagnant defense budget in 2020. That document called for spending of around UAH102.5 billion, a slight decrease from the approved level for 2019.

At the time of the draft budget’s release, Defense Minister Zahorodniuk was pressing for a larger defense budget.  He said, “We are developing proposals to increase the budget. This is preliminary data. We think the total amount will be different” from the draft level.

Ukraine’s defense budget has increased dramatically over the last few years as the country grapples with an insurgency in the East and tension with Moscow, which annexed the Crimean Peninsula in 2014. President Zelensky has pushed for a peace agreement, announcing on October 1 that Ukraine has accepted the ‘”Steinmeier formula,” a proposal for resolving the crisis in the East. Even so, the country continues to invest heavily in its military.

About Derek Bisaccio

Military markets analyst, covering Eurasia, Middle East, and Africa.

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