7 Mar 2023 12:02

Ukraine still has funding gap of $10 bln for 2023 budget deficit, but risks low - finance minster

MOSCOW. March 7 (Interfax) - Ukraine still lacks firm commitments from partners to cover $10 billion of the 2023 state budget deficit, but the risks that the problem will not be solved are not high, Ukrainian media quoted Finance Minister Sergei Marchenko as saying at a discussion organized by the Economic Strategy Center on Monday.

"There's still a gap of $10 billion. I would prefer to stick to this figure while there are no firm commitments from our partners. There is an understanding, but it's not yet firm enough. As soon as there are firm commitments from our partners, we can say that the figure will be lower," he said.

This figure will be "covered easily" if there is a fully-fledged program with the IMF, if the negotiations that Ukraine is conducting come to fruition, Marchenko said.

He said the situation last year was much more complex and unpredictable, and the deficit was much larger.

"Now the situation is more or less stable, we can predict regular inflows from our partners. I do not expect any particular risks of shortfalls," he said.

Ukraine needs to find about $5 billion to fully cover the state budget deficit in 2023 totaling $38 billion, Ukrainian Prime Minister Denis Shmygal said at the end of February. "Now, in light of all agreements, we need about $5 billion to cover the deficit. We're planning to raise this from the IMF, talks about it are already underway," he said.

Ukraine is counting on the launch of a new long-term program with the International Monetary Fund worth more than $15 billion.

Ukraine and the IMF are currently carrying out a Program Monitoring with Board involvement (PMB). Ukraine hopes that the PMB will be replaced by an Extended Fund Facility, or EFF, worth around $15 billion at the beginning of Q2 2023.

Other sources of funding for the deficit include the European Union's concessional loan of 18 billion euros has already been announced, and $10 billion in donor aid from the United States.