Covering the Budget Deficit
The Ministry of Finance expects to receive $38.4 billion in Western aid, which will be the major source for covering the budget deficit of 19.6 percent of GDP next year. Ukraine already has agreements with the EU, the IMF, and the IBRD for $17.8 billion to be received in 2025. The rest of the sources of financing are yet undefined.
Chiefly, the Ukrainian government hopes for a positive G7 decision on €50 billion in loans secured by profits on Russia’s frozen international reserves in Europe. This decision should come down in December 2024.
At the same time, on September 20, during her visit to Kyiv, Ursula von der Leyen promised €35 billion next year, which would be a part of the €50 billion package. According to the Ukrainian Finance Ministry, this aid is to be given to Ukraine in the form of nonreturnable grants. If this commitment is supported by the European Parliament and the European Commission in December 2024, not only will Ukraine have a deficit-free budget for 2025, the cabinet will also be able to close the financing gaps in the 2024 state budget.
Altogether, if these two funding sources are available to Ukraine in 2025, Kyiv will not need to depend on the new U.S. administration’s financial aid next year. Nonetheless, Washington’s decision on new defense aid will be critical for Ukraine in 2025.
The draft budget for 2025 is now being discussed between the parliament and the cabinet, which may result in some changes. But the general framework of this document demonstrates well how the Ukrainian government assesses the country’s economic prospects in 2025. Ukrainians hope for the West’s solidarity and the wisdom of American and European elites in helping to find an acceptable path for Ukraine to end this war. But before that happens, Ukraine is preparing its economy and the country for the war to continue in 2025.
欧盟太抠了。
