War will continue in 2025, we need another $12-15 bn from the West - Ukrainian Finance Minister
Photo: Finance Minister Sergii Marchenko (Vitalii Nosach, RBC-Ukraine)
Ukrainian Finance Minister Sergii Marchenko, in an interview with RBC-Ukraine, stated that Ukraine, along with the IMF, estimates an additional financial need of $12-15 billion from partners for 2025 due to the continuation of the war into next year.
Current financial estimates and needs
He reminded that while preparing the current program with the IMF, one of the key parameters was that the active phase of the war would last until mid-2024, but this forecast did not materialize.
"Now we are constantly discussing with our partners that we need additional financial assurance because the war will continue in 2025, and we need to have a buffer," the minister said, estimating the additional needs for 2025 at $12-15 billion.
According to Marchenko, these estimates fully correspond to the discussions between the Ministry of Finance and the IMF. "They also potentially see this as an additional need beyond what is currently provided for in the program," the minister said.
Ukraine's commitment and signals to partners
At the same time, in the minister's opinion, Ukraine, by raising taxes, also needs to send a signal to its partners and silence critics who say that Ukraine's own contribution is insufficient.
"We are showing that we are ready for the most difficult decisions and that we are making our own contribution. We are approaching our partners and saying: here is a deficit of 500 billion hryvnias, and here are the solutions to cover it. But we also expect you to provide sufficient financial assurances for 2025 so that we can finance the budget," Marchenko explained.
According to him, the current assurances from our partners are insufficient, according to the IMF program, for the government to submit a balanced budget to the Rada for next year.
War forecasts
It should be noted that the current IMF program is $15.6 billion. 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.
In addition, Fitch Ratings, an international agency, predicts a very prolonged war between Russia and Ukraine. Fitch expects the war to continue throughout 2024 and 2025 within its current parameters.
