Reality forcing Ukraine to seek ways to balance budget without external support - minister
MOSCOW. April 1 (Interfax) - Ukrainian Finance Minister Sergei Marchenko has called for the country to look for other ways to balance its budget needs, since current macroeconomic stability in the country depends largely on financial support from abroad.
"The situation with macroeconomic stability is fairly simple - if there is money there is stability and if there is no money there is no stability", Ukrainian media quoted Marchenko as saying at the "Ukraine's European Path: Dialogues About the Future" forum, a video clip from which was posted on social media.
"If we're talking about GDP indicators, the exchange rate dynamic, price dynamic, everything is very stable [in Ukraine]. Sometimes too stable. We constantly convey these messages to our colleagues from the National Bank," Marchenko said.
"We want our current magical reality to take into account the prospect that it might not always be this way. And, perhaps, we need to already now think, prepare for what awaits us in the second half of 2024, what awaits us in 2025," the minister said.
Ukraine currently depends for half its needs on partners, and every additional dollar of aid is hard to come by, he said.
"This means only one thing: we need to accept this reality, because however persuasively we argue that our situation is worsening or at the very least not improving, it's an insufficient argument for our partners to say that they are prepared to support us financially for as long as needed," Marchenko said.
He said the Finance Ministry is deciding how to increase the degree of independence and be ready for a situation when Ukraine will not receive sufficient funds.
Although Ukraine's budget received a record $9 billion of external aid in March, this was preceded by two months when aid amounted to just 10% of what was needed, he said.
"Therefore, we still have much to work on. And, again, I don't intend to say that everything is bad for us or that the situation will deteriorate. I'm just saying that reality is forcing us to also look for other ways of balancing our budget needs, not just counting on international support," Marchenko said.
The updated Extended Fund Facility program with the International Monetary Fund projects that external financial support for Ukraine will drop to $38.1 billion this year and $22.9 billion next year from $42.5 billion in 2023.