Ukraine’s economy depends on international aid

Managing Director of the International Monetary Fund, Kristalina Georgieva, urged Ukraine’s allies to immediately unblock economic aid.

In an interview with the Financial Times, Georgieva warned that although Ukraine will be able to survive without additional funding for “several months”, long-term delays could harm the country’s economic recovery. Delays in funding could force the Ukrainian government to print money to cover the budget deficit, risking accelerating inflation.

The US Congress has still not approved the aid package for Ukraine. Currently, the US funds for direct budget support of Ukraine have been exhausted, according to the reports of the American government. The EU is also considering a program to support Ukraine in the amount of 50 billion euros for four years.

“The work will continue in the US and in Europe. Ultimately, I am optimistic that they will be able to secure funding,” Georgieva told the FT.

Last week, Ukraine received almost $900 million in a new tranche from the IMF.

The IMF estimates the total need for external funds for Ukraine at the level of 42 billion dollars next year. Responding to the Voice of America’s question about the risks for international support to Ukraine, the head of the IMF mission in Ukraine, Gavin Gray, said that the Fund “expects all donors to fulfill their obligations.”

According to the FT, Ukraine expects to receive 18 billion dollars next year. from the EU, 8.5 billion dollars. from the USA, 5.4 billion dollars. from the IMF, $1.5 billion. – from international development banks and 1 billion dollars from Great Britain.

Speaking to the press on December 11, Gray added that “the risks to external financing are there, but they are not necessarily higher than before” and noted the stable funding of economic support from international donors, which continues.

The Ukrainian economy is recovering, and financial and economic stability is maintained, the IMF says. After falling by more than 29% in 2022, the Ukrainian economy is recovering and this year’s growth could be 4.5%, according to the Fund’s forecasts.