International financial support fundamental to balance of payments - National Bank of Ukraine chief

MOSCOW. Oct 7 (Interfax) - International financial support for Ukraine has become a fundamental factor in the balance of payments, Ukrainian media quoted Andrei Pyshny, governor of the National Bank of Ukraine, as saying in a message to NBU employees on the third anniversary of his appointment as the regulator's chief.

Pyshny said there had already been eight successful revisions of the Extended Fund Facility (EFF) program with the International Monetary Fund, and negotiations were underway on a potential new program to maintain a foundation for the consolidation of international assistance for Ukraine in the future.

According to the balance of payments published by the NBU, Ukraine's foreign trade deficit increased from the pre-crisis $2.7 billion to $25.7 billion in 2022, $37.9 billion in 2023, $38.6 billion in 2024 and $34.3 billion over the first eight months of this year.

In particular, the services trade surplus of $4.0 billion in 2021 was replaced by a deficit of $11.1 billion in 2022, when the largest outflow of migrants from Ukraine took place. This deficit narrowed to $8.7 billion in 2023 and then $5.6 billion in 2024, and was $3.9 billion for the first eight months of this year.

At the same time, a large-scale influx of international credit and grant financial aid offset this increase in the foreign trade deficit. As a result, while the 2021 balance of payments surplus of $0.5 billion turned into a deficit of $2.9 billion in 2022, the first year of the crisis, by 2023 a surplus of $9.45 billion was recorded, 2024 was balanced, and for the first eight months of this year, a surplus of $1.9 billion was recorded.

The current four-year Extended Fund Facility (EFF) with the IMF, worth $15.6 billion and approved in March 2023, initially envisaged total external financing for Ukraine with the participation of international partners at $115 billion in the baseline scenario and $140 billion in the negative scenario. However, as the crisis dragged on, these figures were increased to $153 billion and $165 billion, respectively.

Ukrainian Finance Minister Sergei Marchenko preliminarily estimates the need for external financing during the new four-year IMF program at $150 billion-$170 billion.