IMF gives forecast on duration of war in Ukraine
Photo: The IMF gave a forecast for war (Getty Images)
The war between Russia and Ukraine will extend into 2025. As a result, Ukraine will need more funds to finance its budget, stated the head of the mission in Ukraine, Gavin Gray.
He stated that the fifth review of the program is currently underway, and the context is clear. The war will last longer and is unlikely to end this year.
As a result, the hope for a rapid recovery of Ukraine's economy has been postponed. Gray says that the economy will continue to grow, but not at a fast pace.
According to him, the Ukrainian government also understands this and is planning higher budget expenditures for 2025.
The IMF mission chief mentioned that the IMF is considering including part of the $50 billion in frozen Russian assets in its calculations for the program with Ukraine.
However, he noted that there have not yet been firm guarantees from the G7 that Ukraine will receive this money. He added that the situation should become clearer in September.
Gray stated that in 2025, Ukraine will need more external financing than previously expected. He believes that a significant portion of the funds will come from donors. But Ukraine’s domestic policies must also be aimed at achieving the desired outcome, he added.
Ukraine's agreement with the IMF on the EFF program for $15.6 billion was approved in March 2023.
Under the program, Ukraine also received political commitments from partners to allocate $122 billion by 2027. At the same time, the IMF has developed a negative scenario for Ukraine’s economy in the event of a prolonged war. In this case, Ukraine’s total funding will increase to $140.7 billion.
