A deficit of 3-4% of GDP: experts predict money printing

The threat of single-handedly coping with the budget deficit in 2024 is becoming real for Ukraine. As noted by economist Oleg Ustenko, if financial aid from the US is significantly reduced or canceled altogether, the country will have to look for other ways to cover the "budget hole".

According to the expert, this year Ukraine received 7.8 billion dollars from the USA to finance various needs, including to cover the budget deficit. But in the next year, such support may be significantly reduced.

"Next year there are real risks that the amount of assistance will be reduced or even canceled. This means that Ukraine will have to look for additional sources of funding," Ustenko said on the air of the Vechir.LIVE .

According to the expert, in the event of a deficit of 3-4% of GDP, the Ukrainian government can resort to hryvnia issuance. According to him, such a step will temporarily cover budget costs, but carries high risks for the economy.

"Monetization of the state budget will, in fact, mean printing money without real security. This can lead to an increase in inflation and a collapse of the purchasing power of the hryvnia," Ustenko stressed.

Given the possible lack of support from international partners, the government of Ukraine needs to look for additional sources to supplement the budget. However, according to the economist, it will be difficult to implement this quickly.

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