Ukraine's Finance Ministry lowers forecast for budget support from EU for 2024
MOSCOW. Feb 26 (Interfax) - Ukraine expects to receive 16 billion euros, around $17 billion, in budgetary support from the European Union in 2024 as part of the Ukraine Facility program, with the total planned volume of external financing included in the state budget at $37 billion, Ukrainian media reported, citing Finance Minister Sergei Marchenko's statement on social media.
"We plan to receive 16 billion euros to finance the state budget deficit this year, and 2 billion euros are envisaged additionally as investment funds allocated for capital investments," Marchenko said.
Marchenko previously said that Ukraine had expected to receive 18 billion euros from the EU budget in 2024 as part of the Ukraine Facility program, at a total volume of 50 billion euros for 2024-2027.
The Finance Minister has clarified that the current plan envisages allocating another 12 billion euros to finance the state budget in 2025.
According to the EU-approved Ukraine Facility structure, 33 billion euros of the 50 billion euros in loans are envisaged for macro-financial support for Ukraine, while the remaining 17 billion euros are grants for reconstruction, investment and technical assistance.
Marchenko did say that absent sufficient external financial assistance, the budget in January-February has been experiencing issues with financing expenses that citizens have not yet experienced.
Marchenko also said that the first 4.5 billion euros from the EU, $1.5 billion of the World Bank Development Loan (DPL), as well as up to $900 million of the fourth tranche of the IMF loan under the Extended Fund Facility (EFF) Arrangement program are expected in March.
"I think that we could weather the first half of the year painlessly, because there are already clear plans for European assistance," Marchenko said.
Marchenko believes that the U.S. will take the necessary decisions to support Ukraine, and that the overall budget plan of $37 billion from external financing will be fulfilled.
"We have received all the required assurances from the U.S. administration that decisions would be taken. If there are complications, then we would contact the countries that have given assurances regarding the IMF program and talk to them about increasing the package, their part to raise assistance to Ukraine," Marchenko said.
Marchenko said that external support still provides 50% of state budget expenditures, while internal revenues and borrowings comprise the remaining 50% that goes to military needs.
Marchenko added that Ukraine's external financing totaled $31 billion in 2022 and increased to $42 billion in 2023.
Ukrainian Prime Minister Denis Shmygal in turn expressed confidence that Ukraine would receive the necessary budget funding this year.
"We understand that the next four years are guaranteed in our international obligations, our programs, so we feel confident and are moving forward," Shmygal said at the Ukraine 2024 forum broadcast online.
Shmygal noted that 2024 has nearly "closed" in terms of international budget support, and that Ukraine is awaiting only the United States' decision.
"We expect support, and we will in fact cover the need to finance the budget deficit. Nevertheless, we are not standing still; we are also working with other countries. Therefore, I am certain that we will definitely cover budget financing this year. We are already working on next year," Shmygal said.