Ukraine is forced to spend $8.3 billion on war, Marchenko says

13 May, 03:30 PM
Ukraine collected only 60% of its planned taxes in April (Photo:REUTERS/Jorge Silva)

Ukraine collected only 60% of its planned taxes in April (Photo:REUTERS/Jorge Silva)

Ukraine has been forced to spend UAH 245.1 billion ($8.3 billion) on the war against Russia instead of its own development, the Minister of Finance Serhiy Marchenko said in a comment to Reuters published on May 12.

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He admitted that certain funds, originally budgeted for development, have been spent on everything from buying and repairing weaponry to emergency support for internally displaced persons.

Reuters notes that the Ukrainian government collected only 60% of its planned tax revenues in April - a shortfall that grants from foreign partners only filled by 79.5%.

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According to the minister, Kyiv urgently needs foreign support, since it has been forced to allocate billions of dollars on emergency spending.

In April, Ukraine received almost $2 billion in external financing, of which $719 million came in the form of grants, while in February, this figure was $5.4 billion, including $801 million in grants, the Minister said.

“If we don’t take into account foreign aid, we now estimate the receipt of revenues in May-June at the level of 45-50% of planned, provided that the situation does not worsen,” Marchenko stated.

The military expenditures of $8 billion correspond to a sum greater than an entire month’s worth of total government spending, going by Ukraine’s 2021 annual spending of UAH 1.84 trillion ($62.28 billion). Kyiv expects to receive a loan of about $767 million from Canada in May, Marchenko added.

“We urge our partners to provide part of the funds as grants to reduce our debt burden, which is already growing due to martial law, as well as the need for financing,” Marchenko said.

The Ministry of Finance of Ukraine has held 27 auctions for the sale of military bonds as of May 10 and raised UAH 55.2 billion ($1.8 billion), $144.1 million and EUR 176.5 million for the state budget.

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