Ukrainian delegation discusses 2024 financing with IMF, World Bank heads - finance minister
MOSCOW. Oct 11 (Interfax) - Ukrainian Finance Minister Sergei Marchenko and his delegation held talks with new President of the World Bank Ajay Banga, International Monetary Fund (IMF) Managing Director Kristalina Georgieva and these organizations' senior officials and teams on the sidelines of the annual meeting of the IMF and the World Bank in Morocco on Tuesday.
"The key task at this year's events is to secure financial assistance for the following year. External financing needs for 2024 are estimated at nearly $43 billion," Ukrainian media outlets quoted Marchenko as saying in a social media post overnight into Wednesday.
Further cooperation with the World Bank and the IMF is one of Ukraine's key priorities, the minister said. After the start of the crisis, these international financial organizations demonstrated leadership in supporting Ukraine, thus making it possible to implement all priority budget expenditures in conditions of extreme uncertainty, he said.
As part of the financial resources mobilized by the World Bank since February 24, 2022, the Ukrainian budget has received loans and grants worth over $26 billion, including through the multi-donor trust fund mechanisms, Marchenko said.
The Ukrainian Finance Ministry and the World Bank recently reviewed the bank's project portfolio in Ukraine for the first time since 2021: its volume for 2022-2023 is the largest over the history of their cooperation and consists of 20 projects worth over $5.5 billion and 1 billion euros in loans and some $2 billion in grants, including within the PEACE in Ukraine, SDPL, Re-Power, RELINC, and HEAL projects, he said.
At their talks in Morocco, the parties discuss sources for financing the 2024 state budget, further implementation of ongoing joint projects and the launch of new ones for the restoration of Ukraine, the Finance Ministry said on its website.
The Ukrainian government expects the crisis to continue in 2024, Marchenko said. Therefore, defense spending will be maintained at this year's level.
Though recovery is one of the government's top priorities, another key task is to finance all priority budget spending, i.e. social protection and humanitarian assistance, the minister said.
World Bank officials assured the Ukrainian delegation that support in strengthening Ukraine's economic resilience would continue.
The meeting with the IMF addressed the economic situation in Ukraine, the state of cooperation and Ukraine's implementation of the Extended Fund Facility (EFF) program, under which Ukraine expects to receive the third tranche of $895 million before the end of the year, subject to a successful second review of the program, the ministry said.
In all, the Finance Ministry has received around $6.3 billion in budget support from the IMF since the start of the crisis, it said.
The key areas of reform outlined as part of cooperation with the IMF under the EFF program include steps to bolster macrofinancial stability, structural fiscal policy, fiscal transparency, strengthening public investment management, deregulation of economic activity and improving the business climate, a tougher crackdown on corruption, and energy sector reform.
The Ukrainian economy continues to function in a full-fledged manner, Marchenko said. GDP is expected to grow in 2023, inflation rates have been declining for nine months in a row, and tax revenues to the budget have returned to the pre-crisis levels.
These tendencies have become possible thanks to the considerable support extended by international partners: external financing stands at $32.6 billion in 2023, totaling $63.7 billion since February 24, 2022, the ministry said.
"At the same time, financing will still be needed badly next year. The budget deficit is projected at $42.9 billion," Marchenko said.