Ukraine is developing an action plan for the International Monetary Fund (IMF) aimed at securing financing and covering the budget deficit in the event of the termination of financial assistance from the United States.
According to the plan, Ukraine plans to expand domestic bond sales, raise taxes, and cut spending.
According to sources, Ukraine intends to present its plan to the IMF during a three-day visit by the fund's mission to Kyiv, which will begin on February 12. IMF staff led by Gavin Gray are planning to visit the capital.
Despite the fact that Ukraine is fulfilling its obligations, the Ministry of Finance and the National Bank believe that there is a risk that the IMF Board of Directors will not approve the next tranche of the loan without a fiscal plan if American funds continue to be blocked.
This year, Kyiv is expected to receive $5.3 billion under the IMF program.
It is important to emphasize that the main source of replacement for American aid is the expansion of domestic government borrowing. Ukrainian banks have a high level of liquidity, and the government is counting on their willingness to invest funds in high-yielding government bonds.
“This could bring in at least $5 billion in revenue this year. The government could also consider raising taxes or cutting spending as needed,” the agency emphasizes.
