Ukraine may need up to $5 billion in monthly financing in 2023, says IMF

26 October 2022, 01:58 PM
Kristalina Georgieva, managing director of the IMF (Photo:Yves Herman / File Photo / Reuters)

Kristalina Georgieva, managing director of the IMF (Photo:Yves Herman / File Photo / Reuters)

Ukraine’s monthly financing needs in 2023 will be around $3-4 billion, but may also rise to $5 billion if Russian attacks on the country’s critical infrastructure continue, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said on Oct. 25.

“We must support the country’s on-going shift from an emergency phase of economic management to a recovery phase, and also set the stage for a successful reconstruction towards a dynamic and competitive economy,” she said at the International Expert Conference on the Recovery, Reconstruction and Modernization of Ukraine in Berlin, Germany.

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“The Ukrainian authorities have earned this support.”

Georgieva said that following Russia’s invasion, the Ukrainian government has done an impressive job in managing the economy through extremely difficult circumstances.

“And the international community has acted decisively – it came together to commit $35 billion in grant and loan financing in 2022 for the people of Ukraine,” she said.

According to the IMF representative, disbursements of all committed funds over the remaining months of the year is urgently needed and will make a difference – especially in light of the recent horrific damage to energy infrastructure inflicted by mass Russian missile attacks.

“Ukraine’s financing needs in 2023 are enormous,” she said.

“The country will do its part, but it also needs a strong effort from its partners. Our current assessment is that monthly financing needs in 2023 will be around $3 billion to $4 billion, reflecting the harsh reality of the large fiscal deficit in the context of a devastating war.

“Should destructions of Ukrainian infrastructure and economic activities become even more far-reaching, the range can go up to $5 billion.”

Georgieva emphasized that the IMF had arrived at these figures by working closely with the Ukrainian authorities on the 2023 budget.

Earlier in October, Ukraine received $1.3 billion in additional emergency financing under the Rapid Financing Instrument (RFI) facility provided earlier by the IMF.

The new IMF financing package provided to Ukraine under the RFI facility should cover the gap in Ukraine’s balance of payments and support the country’s creditworthiness.

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