Ukraine may receive about $9 billion in international aid in March

Origin: Ukrinform.

This opinion was expressed by Maksym Samoiliuk, an economist at the Centre for Economic Strategy.

“The first two months of 2024 were not very fruitful for Ukraine in terms of international assistance. As of 23 February, we received only $436 million in funding from Japan. Given that last year we received an average of $3-4 billion in foreign financing every month, and our budgetary needs have not disappeared, in January the government had to postpone some expenditures to reduce the deficit to an acceptable level,” Samoiliuk said.

At the same time, the expert noted, the prospects for funding in the near future are brighter. “Ukraine has already agreed on the next revision of the IMF programme at the expert level, which will allow us to receive $890 million. By the end of March, Ukraine also expects to receive an additional $1.8 billion from Japan and the first tranche of €4.5 billion ($4.9 billion) from the EU.

“MP Yaroslav Zheleznyak also said that Ukraine is to receive a $1.4bn loan from the World Bank. That is, Ukraine may receive a total of $9 billion in March, which will allow it to return to more stable financing of expenditures. It is important that the rhythmic financing continues in the future,” Samoiliuk emphasised.

He reminded that the Government of Ukraine expects to receive about USD 37 billion in aid this year. Samoilyuk explained that out of this amount, the declared need of Ukraine, we expect to receive USD 19.5 billion (EUR 18 billion) from the EU; another USD 5.4 billion – from the IMF, if we fulfil all the conditions of the cooperation programme in time and in full. If we add the previously mentioned funds from Japan and the World Bank, we will have about $8.5 billion of unmet need. From the United States, we can receive about $8 billion in budget support, if such funding is approved by Congress. In addition, Ukraine can receive funds from other partners, such as Norway.

“In total, we will receive USD 37bn of international budgetary assistance this year. It is quite realistic to receive USD 37 billion of international budgetary assistance this year. But there is still a risk that the actual aid will be less. In this case, the government will have to look for additional ways to mobilise domestic revenues, such as raising taxes or stepping up fundraising through domestic government bonds. It’s too early to talk about equity financing, as there is no need for it at the moment,” the expert said.