MOSCOW, February 9Kiev is considering a plan that will help maintain the flow of funds from the International Monetary Fund (IMF) if assistance from the United States remains blocked, Bloomberg reports, citing sources .
«Ukraine is considering a plan that includes expanding domestic bond sales, raising taxes and cutting spending to plug a budget hole in an attempt to keep money flowing from the IMF if crucial U.S. aid remains blocked,» the agency said.
According to sources, Ukrainian officials intend to present their plan to the IMF during a visit of fund representatives to Kyiv next week. It is noted that IMF representatives under the leadership of the head of the Ukrainian mission Gavin Gray will arrive on February 12 for a three-day visit.
According to a Ukrainian official, the country's Ministry of Finance and the Central Bank believe that if funds from the United States continue to be blocked, there is a risk that the IMF board of directors will not approve the next loan repayment in the absence of a financial plan .
He added that a key source of funds to replace US funds would be increased domestic government borrowing. According to him, this approach will generate revenue of up to $5 billion in 2024. In addition, according to the Ukrainian official, Kyiv could raise taxes or cut spending if necessary.
Previously, the agency calculated that, according to the NBU and the Open Budget, Ukraine’s budget deficit continued to increase at the end of 2023, reaching 20.5% of GDP, which became a new record for the entire existence of the country. At the same time, Ukraine has been living with a budget deficit for the last 30 years.
As Ukrainian parliamentarian Alexandra Ustinova stated, holes in the state budget are being closed with the help of Western funding; if assistance from the United States is stopped, the authorities will be forced to turn “with an outstretched hand” to the G7 countries. At the end of November, Vladimir Zelensky signed a draft law on the state budget of Ukraine for 2024 with a deficit of more than $43 billion.
On February 1, EU leaders at a summit in Brussels agreed to allocate 50 billion euros of macro-financial assistance to Ukraine.