Askume, Sept 10 – Ukrainian Prime Minister Denys Shmyr said on Tuesday that although Ukraine’s economy is growing steadily, negotiations with the International Monetary Fund on Ukraine’s financing needs remain difficult.
Despite nearly 31 months of fighting since Russia’s invasion in February 2022, Kiev has managed to maintain macroeconomic and financial stability, supported by nearly $100 billion in economic aid from Western partners.
The International Monetary Fund monitoring mission is in Kyiv this week conducting its fifth review of a $15.6 billion loan programme for Ukraine.
Schmeichel said discussions on the 2025 financing plan were “difficult” and “complex”, but did not elaborate on what the obstacles were.
“This is a difficult task, not an easy one… negotiations with the International Monetary Fund are complex and have many challenges. In fact, this work will not be completed until 2025,” Shamiyar said at a press conference.
The International Monetary Fund and the Ukrainian government are discussing possible tax hikes to raise revenue and reduce next year’s projected $35 billion budget deficit — of which only $20 billion will be covered.
The government also needs about $12.2 billion in defense spending for the rest of this year.
So far, Ukraine’s defense spending target is to reach about 1.7 trillion hryvnia ($41.5 billion) by 2024. But as the fighting intensifies and Kiev steps up mobilization efforts, more money is needed for ammunition and military salaries.
Schmihl said the government’s main priorities are budget financing for the military, maintaining macroeconomic stability and ensuring winter energy resilience.
He said continued cooperation with the International Monetary Fund is crucial to ensure predictable and sustainable financing for Ukraine this year and next.
Shmyhal said Ukraine’s tax revenues exceeded targets by about 75 billion hryvnias so far this year. He also reiterated plans to increase borrowing and raise a “war tax” paid by residents and businesses.
Shmyhal said Ukraine’s gross domestic product grew 3.7% in the second quarter.
Ukraine’s gross domestic product grew 2.7% in July thanks to a bumper harvest, stable export routes and rising national defense spending, official data showed.
The statistics bureau said the inflation rate rose to 7.5% year-on-year in August.
