8 Nov 2023 15:21

Ukrainian Finance Ministry says $29 bln of external financing missing from 2024 state budget

MOSCOW. Nov 8 (Interfax) - Ukraine's draft 2024 state budget provides for $41 billion of external financing, but there is currently no confirmation for the receipt of $29 billion of this and it will be necessary to look for additional internal sources of revenue, Ukrainian media quoted Finance Minister Sergei Marchenko as saying.

"It's my problem, how to cover them. This is the government's problem, the embassies' problem, the president's problem. We are looking at how to cover that $29 billion," he said at a webinar organized by the Centre for Economic Strategy which was posted on social media.

Marchenko said that the problem could be solved "within the fiscal framework" in the absence of up to $5 billion-$10 billion. "In some places we will reduce expenses, in others we may increase taxes. But if this problem is $20 billion, then I honestly don't know. Moreover, I am more than sure that this will be the case, that next year we will return to the issue of finding additional resources," he said.

Marchenko said that so far he did have an answer to the question of how to cover all the necessary requests from the Defense Ministry next year. "We have reached the limit purely from the point of view of our restrictions in terms of taxation, and we are also close to the limit in terms of domestic borrowing. Therefore, the search for internal resources is now the most pressing issue," Marchenko said.

In this regard, he again noted the importance of redirecting UAH 122 billion of personal income tax to the state budget and local budgets, including UAH 25.8 billion this year and the remainder next year. "I think this will not be the last unpopular decision for 2024," he said.

Ukraine is expected to receive over $42 billion from international partners this year. In the Ministry of Finance attracted about $35.4 billion in external financing in total for urgent needs of the state budget in total in January-October 2023. The Ukrainian government previously estimated the external financing requirement for 2024 at $42.9 billion.