By Olena Harmash
KYIV (Reuters) – Kyiv has relied heavily on economic assistance from the West during Russia’s war on Ukraine, but faces uncertainty over where funds will come from in 2024.
Ukraine has received more than $68.5 billion in budgetary support since Russia’s full-scale invasion in February 2022, according to finance ministry data.
Ukraine spends all its revenue on the defence sector and army, while budget sector overheads have largely been covered by Western aid.
Next year the government will again need injections of financial support to disburse social payments, wages for budget workers and pensions for millions of Ukrainians.
The government expects a budget deficit of about $43 billion in 2024 and plans to cover it with domestic borrowing and financial aid from its Western partners.
Finance ministry officials have previously said they expect to receive $41 billion in international aid next year.
But the government and analysts are worried by signs of uncertainty over the provision of that financing. Some analysts predict Western aid is likely to start diminishing next year.
Here are some facts and figures about the main Western economic aid packages that Ukraine hopes to receive.
EUROPE’S UKRAINE FACILITY
This summer, the European Union announced a 50-billion-euro ($54.8 billion) multi-year support package called the Ukraine Facility to be delivered through 2027.
Ukrainian officials have said they hope to receive 18 billion euros of budgetary support from the facility in 2024, financing that would be crucial for covering the budget gap next year.
At a summit in Brussels on Thursday, the EU’s leaders were unable to overcome resistance from Hungarian Prime Minister Victor Orban to agree on providing the assistance package to Ukraine.
EU leaders have decided to return to discussing the matter in January, Dutch Prime Minister Mark Rutte said.
Other leaders have assured Kyiv they can channel aid to Ukraine outside the EU budget if Budapest maintains its blockade.
U.S. ASSISTANCE
Ukraine is in talks with the U.S. government to receive economic assistance next year. Kyiv is seeking $8.5 billion in aid to help cover its budget deficit, senior lawmaker Yaroslav Zheleznyak has said.
U.S. President Joe Biden’s administration asked Congress in October for nearly $106 billion to fund plans for Ukraine, Israel and U.S. border security, but Republicans who control the House with a slim majority rejected the package.
Many weeks later, the package is still being discussed and its passage remains uncertain.
IMF PROGRAMME
Ukraine’s cooperation with the International Monetary Fund is important for its macroeconomic and financial stability. This year the IMF approved a new 48-month lending programme worth some $15.6 billion.
The IMF approved a $900-million disbursement for Ukraine this week, bringing total funding this year to $4.5 billion.
In 2024 the government hopes to receive $5.4 billion but each tranche is linked to a series of reform targets and economic indicators.
Ukraine also expects about $1.5 billion from other international financial institutions, including the World Bank, next year.
OTHER PACKAGES
Ukraine has agreed financial support packages from Britain and Japan for 2024. It is also in talks with the governments of Canada, Norway, South Korea and others to secure other funds.
($1 = 0.9124 euros)
(Reporting by Olena Harmash; editing by Tom Balmforth, Angus MacSwan and Timothy Heritage)
