The international rating agency S&P Global Ratings predicts an 8% devaluation of the hryvnia against the dollar by the end of 2024, to UAH 41.02/$. It is indicated as predictive in the agency's latest report on Ukraine.
S&P believes that the hryvnia/dollar exchange rate will decrease annually for at least the next four years:
– 2024 – UAH 41.02/$;
– 2025 – UAH 43.89/$;
– 2026 – UAH 46.53/$;
– 2027 – UAH 49.32/$.
Forecasting the devaluation of the hryvnia, S&P analysts note that they expect Ukraine to receive international aid in the total amount of $122 billion by 2027, taking into account $43 billion already disbursed in 2023 and $38 billion expected in 2024.
"While we assume that international support for Ukraine will remain strong, we note the risks to its sustainable flow. Domestic political tensions in the US have stalled Congressional approval of military and financial aid to Ukraine this year. The Ukrainian government expects to receive $38 billion from all donors in 2024, including about $8 billion in grants from the United States. Our baseline scenario assumes full utilization of these funds this year. However, in the event of a shortfall in funding from the US, we believe that the consequences can be manageable, as the shortfall can be covered by other donors and domestic borrowing. However, after 2024, there is a risk that external support for Ukraine may be less due to the busy schedule of elections in key donor countries and the possibility that some governments will consider the cost of providing further support to Ukraine too high," S&P Global Ratings concluded.
