Ukrainian authorities expect international partners to help cover a $38 billion budget deficit next year.
Ukraine needs $3.5 billion in financial aid per month to cover the budget deficit by 2023. Finance Minister Sergei Marchenko stated this in a speech at the G7 meeting, the ministry’s press service reports.
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“This is the budget of a fighting nation, so the priorities are funding the army, supporting the population and maintaining macro-financial stability,” he said.
The Minister detailed that the Cabinet of Ministers plans to increase funding for the security and defense sector to the level of 17.8% of GDP. The forecast for real GDP growth is 4.6%, inflation is around 30%, and the average exchange rate is about UAH 42 per dollar. The budget deficit is planned at the level of 20% of GDP.
“In the draft budget, we consider the possible continuation of the conflict in 2023. A prolonged war will increase the damage to the infrastructure, the number of displaced people, worsen the economic hardship and poverty may increase. If the our needs will not be fully funded, it will lead to a serious economic downturn,” he said. Marchenko.
He recalled that authorities have reduced non-priority spending and refocused it on critical needs and support for defense efforts and the people most affected by the war.
“Therefore, due to next year’s budget deficit in the amount of $38 billion, Ukraine relies on systematic financial support from the EU and G7 countries,” the minister added.
Marchenko said that in 2023, we should continue to attract external concessional funding and grants to cover priority social spending of the budget, as well as fundraising for rapid recovery.
“The priority is the restoration of basic infrastructure services. It is necessary to create conditions for those forced to leave the country and IDPs to return home. It is important to restore all public social services for our citizens, including education, care health, housing and social protection,” – said the head of the Ministry of Finance.
He also recalled that due to the Russian invasion, Ukraine needs additional funds in the amount of $5 billion per month. Overall, to date, Ukraine has received financial support from foreign partners in the amount of $20.7 billion, of which almost 50% are grant funds that do not require repayment. Until the end of the year, Ukraine expects 5 billion euros from the EU and 4.5 billion dollars from the United States.
It should be noted that on the eve of President Volodymyr Zelensky proposed to the international community to create a format of economic support for Ukraine following the example of the so-called Ramstein format.
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Source: korrespondent
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