The threat of having to cope with the budget deficit on its own in 2024 is becoming real for Ukraine. As economist Oleg Ustenko notes, if financial assistance from the United States 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 from the United States to finance various needs, including covering the budget deficit. But next year, such support may be significantly reduced.
“Next year, there are real risks that the amount of aid will be reduced or even canceled. This means that Ukraine will have to look for additional sources of funding,” Ustenko said on the Vechir.LIVE .
According to the expert, in the event of a deficit of 3-4% of GDP, the Ukrainian government may resort to issuing hryvnia. Such a step, he said, would allow temporarily covering budget expenses, but carries high risks for the economy.
“Monetization of the state budget will, in fact, mean printing money without real collateral. This may lead to increased inflation and a collapse in the purchasing power of the hryvnia,” Ustenko emphasized.
In the face of a possible lack of support from international partners, the Ukrainian government needs to look for additional sources to replenish the budget. However, according to the economist, this will be difficult to implement quickly.
