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Annual inflation in Ukraine could rise to 30% next year, an eight-year high, Interfax Ukraine cited Finance Minister Denys Shmyhal as saying on Tuesday as he presented a draft budget dominated by the war with Russia.

Shmyhal said 1.14 trillion hryvnias , or almost half the entire 2023 budget, would be directed to the security and defence sectors.The budget – which Shmyhal called “a conservative average pessimistic calculation” – sees real gross domestic product growth of 4.6% with annual inflation of up to 30%. This would be the highest since the average 48.7% recorded in 2015.

Another 35% of the budget would be spent on social programmes such as pensions, assistance to low-income families, payments to internally displaced persons as well as spending on medicine and education, Shmyhal said. To help make up the shortfall, Kyiv would reduce the number of officials, cutting salaries and bonuses.

Ukraine has estimated the costs of the war combined with lower tax revenues has left a $5 billion-a-month fiscal shortfall – or 2.5% of pre-war GDP. Economists calculate that pushes the annual deficit to 25% of GDP, compared with just 3.5% before the conflict.

 

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Ukraine is in the middle of war but its finances are better than us here,we are led by business man Cyril Ramaphosa

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