Ukraine needs external financing plan until 2027 - Finance Ministry, Economy Ministry
MOSCOW. June 5 (Interfax) - Donor Coordination Platform partners and Ukraine need to elaborate a long-term plan for external financing and in-kind support until 2027 to overcome macroeconomic risks and maintain macroeconomic stability, Ukraine's Economy and Finance Ministries said.
"While the reforms outlined in the Reform Matrix are required, they are not sufficient on their own for a faster economic recovery. Ukraine will need assistance from partners to implement additional measures both in the reforms and in other areas to make its vision a reality," Ukrainian media quoted the Economy and Finance Ministries as saying in a joint report on the priorities of economic policy aimed at ensuring economic growth.
They named facilitating a faster recovery by addressing the major constraints, in particular, meeting energy needs, securing sustainable and predictable access to foreign markets, overcoming labor shortages, and restoring critical logistics (SEAL+) as another priority.
According to the Economy and Finance Ministries, market liberalization measures, defined in time and scope, as well as access to the European Union funds, are essential.
"In general, the logic of accession negotiations should ensure that the Ukrainian economy and society experience tangible benefits 'on the go,' even before formal accession to the EU. Ukraine should aim for a rapid and accelerated integration process," the report said.
Its authors said it is also imperative to expand growth potential by complementing the required structural reforms with commitments from partners to investment and technology transfer that will boost productivity and capital accumulation, with specific timelines and volumes defined over time.
The Economy and Finance Ministries noted that Ukraine's Plan under the Ukraine Facility is a good example of this approach, where the implementation of the reforms and investment indicators of the Plan incentivizes both external budget support and the flow of financing and investment to the private sector.
"Complementing these measures with an actual inflow of external financing and technology transfer through partnerships and joint ventures between Ukraine, the EU and G7 countries will greatly improve the performance of the economy," the report said.
Its authors noted that the priority sectors of development, as indicated in Ukraine's Plan and at the meetings of the Donor Coordination Platform, are energy, transportation, agricultural sector, critical materials, and digital transformation.
At the same time, it is noted that while external donors will continue to be an important source of funding, there is a need for greater autonomy in generating tax and non-tax revenues to ensure budget financing, given the continued high needs related to defense.
"We have begun drafting the Budget Declaration for 2025-2027, which will form the basis for drafting the 2025 budget. We are committed to raising appropriate additional revenues to meet continued defense-related needs and to implement reforms that improve the efficiency of non-defense spending, including those that strengthen the effectiveness of the social safety system, improve the efficiency of the education system, and mitigate fiscal risks in the pension system," the report said.
Its authors noted that Ukraine would continue to take measures to reduce untaxed activities in the significant shadow economy, as well as focus on measures aimed at increasing budget revenues and countering corruption threats in customs administration.
