Ukraine is to hike military spending and undergo further mobilization in 2015, according to President Petro Poroshenko.
In 2015 the
level of funding for the defense and security sector from the national budget
would be close to five percent of GDP, Poroshenko said on Dec. 20 at
the National Security and Defense Council meeting.
The planned military budget of Hr 86 billion ($5.4
billion) considerably exceeds this year’s military spending which totaled Hr 54
billion, or around 3.4 percent of the country’s budget. This is seen as a a
heavy burden for the country heavily hit by economic crisis and sharp hryvna
devaluation in the aftermath of Russia’s annexation of Crimea in March and ongoing
war with Russia-backed separatist militants in the east of Ukraine.
On Dec. 19, London-based Standard & Poor’s ratings
agency downgraded its
long-term foreign currency sovereign credit rating on Ukraine to ‘CCC-‘ from
‘CCC’ with negative outlook.
Ukraine’s foreign currency reserves dropped from $16.3 billion in May
2014 to just over $9 billion at the end of November 2014. The fiscal deficit
will reach 8.5% of GDP in 2015, while the current account deficit, which has
narrowed to an estimated 4% of GDP in 2014, will continue declining next year. the agency said in a report.
Poroshenko
has stated the anti-terrorist operation in eastern Ukraine costs the state Hr
100 million per day. “The operation in eastern Ukraine costs Hr 100
million per day,” said Poroshenko.
Poroshenko
also announced the plans to hold new partial
mobilization in 2015, adding that conscripts
would not be sent to the zone of the anti-terrorist operation, until they undergo
proper training.
