The deficit of the state budget of Ukraine, according to the draft approved by the government on September 13, is estimated at about $38 billion, and the main sources of its financing are planned to be the United States – $18 billion, the IMF and the EU – up to $12 billion each, Prime Minister Denys Shmyhal has said.
“About $38 billion is the budget deficit next year, which we will raise from our international partners and through war bonds. These are two sources, in addition to tax revenues, which we see next year,” he said at a press conference in Kyiv on Wednesday.
Shmyhal recalled that the IMF agreed at an informal meeting this week to provide Ukraine with another $1.4 billion under the Rapid Financing Instrument (RFI).
“We agreed that we will continue to work with the IMF more actively this year in order to have an IMF program next year. The program, of course, will be special for Ukraine, because we have special circumstances that have not been in the past 80 years for European continent,” the prime minister said.
Speaking about the end of this year, he added that another $8bn of EU macro-financial assistance will arrive: $5bn in a long-term soft loan for 18 years this month and $3 billion, possibly in the form of a grant, at the end of October-November. “The final decision has not yet been made,” Shmyhal said.
According to him, Ukraine also expects to receive an additional $4.5 billion from the United States by the end of this year as part of a recent proposal by President Joseph Biden: $1.5 billion per month.
The prime minister said that in 2023 it is planned to receive monthly EUR 1 billion from the EU and $1.5 billion from the United States, as well as a total of $12 billion for the year from the IMF.
“Next year we are talking about three sources of financing our deficit. The European Union – we are asking for EUR 12 billion macro-financial assistance: EUR 1 billion each month, the IMF, which should provide $12 billion under the program next year, and the United States – $1.5 billion per month. This will together finance $3.5 billion per month, which will completely cover our budget deficit,” Shmyhal said.
He added that there is also an additional “safety cushion” in the form of war bonds for emergencies or to finance gaps in the flow of international aid.