Without help from the US, Ukraine will have to expand its borrowing: What else is foreseen in Ukraine’s Plan B?

Ukraine is working on a plan to cover the budget deficit without US support. The plan includes three elements: expanding domestic bond sales, raising taxes, and cutting spending. It is to be proposed to the IMF during a three-day staff visit to Kyiv this week. “The Ministry of Finance and the National Bank believe that there is a risk that the IMF’s board of directors will not approve the next loan disbursement without a fiscal plan if US funds are still blocked,” Bloomberg explained. According to the plan, the primary replacement source for American funds is the expansion of domestic public borrowing – at least $5B this year. The head of the European Parliament’s budget committee estimated that €50B from the EU would not be enough for Ukraine. After all, Ukraine’s non-military needs amount to €3B per month – €36B per year. Under the four-year program, Ukraine will receive €12.5B per year. The EU and the US should cover 50% of annual non-military needs each (€18B each). Therefore, Ukraine will face an annual €5.5B budget shortfall.


Ukraine War 24

Ukraine War 24

Read Previous

Ukraine’s position at the front is deteriorating while the US delays funding.

Read Next

Last year, the amount of mortgage loans issued in Ukraine increased by 400%.