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Posted On

06
October
2022

Ukraine may attract $16 bln by late 2022 under optimistic scenario, but global risks higher – Finance Minister

KYIV. Oct 6 (Interfax-Ukraine) – Since the beginning of the war, Ukraine has attracted more than $19 billion to finance the state budget deficit caused by the war and, under an optimistic scenario, may raise another $16 billion by the end of the year, Finance Minister Serhiy Marchenko said.

"This will finance all the needs," he said at the Forbes conference "Without Rose-Colored Glasses. Business and the State During the War" on Thursday.

According to him, next year the situation with the budget will remain as difficult, since as in this year, the share of military spending is 50%, so raising funds from international partners remains number one priority for the Ministry of Finance.

At the same time, Marchenko stressed that the situation in the world and partner countries has changed dramatically since the beginning of the war. He explained that at the beginning of the war, these countries were in a normal state – almost without recession indicators with fairly controlled inflation. Now, in particular in connection with Russian aggression, threatening factors have arisen: a global decline in the economy, including in the US and the European zone, rising energy and food prices, inflation at a 40-year high with rising government borrowing rates, the minister said.

"The consequences are political crises and resignations of governments, including in Europe. Internal challenges were stronger than external ones," he added.

At the same time, Marchenko expressed hope that Ukraine would be able to attract the $38 billion included in the draft state budget for 2023 to finance its deficit.

According to the Ministry of Finance, as of October 4, since the beginning of the war, external financing of the budget of Ukraine reached $19.904 billion, including grants – $10.506 billion, while the declared – $36.13 billion.

The United States and the European Union announced the greatest support for Ukraine – $12.99 billion and $11.5 billion, respectively, but if the United States has already allocated $8.49 billion, or 65% of this amount, and all in the form of grants, then the EU – $2.908 billion, or 25%, of which only $626 million is in the form of grants.

The IMF closes the top three, which allocated $1.41 billion out of the promised $2.71 billion in the form of a loan, and another $1.3 billion is expected through the expansion of RFI emergency financing.