Ukraine was forced to spend 245.1 billion hryvnia ($8.3 billion) on the war with Russia instead of investing in development, the finance minister said on Thursday, pointing to the enormous economic cost of the invasion launched by Moscow on February 24.
The figure, previously undisclosed by the Ukrainian government, illustrates the economic turmoil facing Ukraine as its troops try to contain Russia’s renewed offensive in the eastern part of the country.
Expenditure from some funds originally budgeted for development ranges from arms purchases and repairs to emergency support for IDPs, Finance Minister Serhiy Marchenko said. According to data from the ministry of social policy, there are 2.7 million officially registered IDPs, although the actual number is many times higher.
In privately written comments, Marchenko told Reuters that the government had collected only 60% of its planned tax revenue for April, which equals 79.5% with donations from foreign partners.
Marchenko said that Kiev urgently needs foreign support as it has to spend billions of dollars additional on emergency spending.
According to Marchenko, Ukraine received about $2 billion in external financing in April, of which $719 million came from donations. He said the figure since February is $5.4 billion, including $801 million in donations.
“Excluding foreign aid, we now estimate revenues in May-June at 45-50 percent of what was planned, unless the situation gets worse,” Marchenko said. said.
types of support
War spending of $8 billion equates to more than a month of total government spending, measured by annual expenditure of 1.84 trillion hryvnia ($62.28 billion) in 2021.
Marchenko said that Kiev is discussing various types of external financial support.
He listed the resources that Ukraine hopes to acquire through the Special Drawing Rights (SDR) account initiated by the International Monetary Fund.
Developed countries can direct some of their SDRs to the account.
“Currently, the Ministry of Finance team is negotiating with our international partners, especially the G7 countries, to send their share of the SDR to support Ukraine,” Marchenko said. Said.
He added that Ukraine expects to receive a loan of about 1 billion Canadian dollars (about 767 million dollars) from Canada in May through the account.
The minister assured that Ukraine will continue to repay its debt regardless of the war.
Our stance on this issue has not changed. We continue to pay our debts and the expenditures we make for this are not very large compared to our budget financing needs,” he said.
“Moreover, we do not yet have reliable medium-term forecasts that would allow us to model the future debt trajectory.”
source: Noticias
