Ukraine has not identified the source of international aid for $19 billion in the 2025 budget
The Cabinet of Ministers of Ukraine predicts that the state budget deficit in 2025 will be covered by international aid in the amount of 36.9 billion dollars. At the same time, the risks of reducing this assistance are assessed as average.
According to the draft budget for 2025 (project No. 12000), it is planned to attract external borrowings in the amount of 1.658 trillion hryvnias (36.9 billion dollars at the exchange rate of 45 hryvnias to the dollar) and internal borrowings in the amount of 579 billion hryvnias. The weighted average interest rate for domestic debt instruments is about 16% per annum, and for external debt instruments – about 5% per annum.
Ukraine is expected to receive $2.7 billion from the IMF, $11.9 billion from the European Union, and $3.1 billion from the International Bank for Reconstruction and Development (USA). In addition, the government plans to attract $19.1 billion from “other creditors”, but the specific sources of this assistance have not yet been determined.
Forecast risks
The government assesses the risk of a decrease in international aid as medium. In the annex to the project, it is noted that this risk is subjective, as it is related to the political and economic situation in Ukraine’s partner countries, which is difficult to predict. One scenario that could materialize this risk is an escalation of hostilities, which could lead to losses of human and fixed capital, which in turn would reduce the potential for economic recovery.
Another potential scenario is the possibility of a global economic crisis or recession. In this case, the risks of a reduction in demand for Ukrainian goods and a slowdown in the reconstruction of enterprises oriented to foreign markets are increasing.
The lack of international financial assistance can have unforeseen consequences that will negatively affect demand and production in Ukraine. This can lead to an increase in domestic financing to cover the deficit, a reduction in budget expenditures, including business support. Such steps can create risks for financial stability, cause inflation and a drop in real incomes of the population.
Since the beginning of 2024, Ukraine has already received $24.5 billion in support from the EU, the IMF and Western partners, and expects this aid to reach $38 billion by the end of the year.
