Ukraine reports good news about the budget, no fear of 'gaps', the US and EU will take care of everything

Ukraine's Finance Minister Serhiy Marchenko recently said that the Eastern European country's financial results have improved significantly this year, with budget revenues in May 2023 increasing by 45% compared to the same period last year.

Ukraine không ngại ngân sách ‘thủng’, mọi việc đã có Mỹ và EU lo

Ukraine's chronically 'holey' budget is constantly being called upon to be filled, by leading donors such as the US, EU, IMF... (Source: DPA)

Ukraine - the Eastern European country engulfed in a military conflict with Russia - is still confident it will balance its budget this year and is already calculating for next year.

Nearly 16 months after the conflict with Russia, Ukraine has balanced its budget this year largely through support from top donors the European Union (EU), the United States, the International Monetary Fund (IMF) and other partners, the official said.

"In 2023, we have much better financial results than a year ago. Thanks to strong financial support and comprehensive measures taken by the government, we ensured a balanced budget and financed important expenditures, mainly covering the basic needs of society," said Marchenko.

“Monetary and fiscal policies are under control this year,” the Ukrainian Finance Minister confidently announced, adding that Kiev has received nearly $22 billion in foreign financial aid so far. Mr. Marchenko also said that Ukraine’s international partners have reiterated their commitment to provide $42.5 billion in budget support this year.

However, when forecasting the budget plan for 2024, the Ukrainian Finance Minister warned of a "huge" gap. Mr. Marchenko called on the US and other countries to continue to intervene to help Kiev make up for this huge gap.

"Ukraine needs foreign help to balance the budget by 2024," Minister Marchenko said, telling the media that "we hope that partners, including the United States and other countries, will step in and cover the costs and help us cover the budget deficit next year."

Earlier in March, the IMF reached an agreement with Kiev on a $15.6 billion financing program to ensure macroeconomic stability.

Recently, the European Commission (EC) also proposed a 50 billion Euro aid package for Ukraine until 2027. The EU affirmed that this aid package will meet 45% of Ukraine's urgent reconstruction and budget needs, estimated at about 110 billion USD.

While these are “very, very good signals,” they will not be enough to close the huge budget gap, Mr. Marchenko said. “That is why we should attract the attention of other important partners, for example, the United States. They should also intervene and at least be interested in committing to financing us,” the finance minister added.

Even if the counteroffensive now underway allows Ukraine to gain a better position, or even win, “peace will not come cheap,” Marchenko said.

“It will be a huge budget deficit, because even if we plan to reduce the amount of money we have to spend on the military campaign, the next day… the social and humanitarian needs will still be huge”...

On this occasion, Ukrainian Finance Minister Serhiy Marchenko also rejected the idea put forward by EU officials that budget support should be quickly phased out in the next two or three years and replaced with loans and guarantees for private investment.

“Maybe we will have some investment boom in Ukraine, tax revenues will double, and we will be able to meet our basic needs. But honestly, it will be like a miracle. And I am not a magician,” said Mr. Marchenko.

In April, speaking at the 2023 Spring Meetings of the IMF and the World Bank (WB) in Washington, DC, President David Malpass emphasized that the amount of money needed to revive the Ukrainian economy would be huge, up to 411 billion USD. This figure is 2.6 times higher than Ukraine's GDP in 2022 and up from the estimated 349 billion USD given in September 2022.

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