The collapse of the hryvnia and hyperinflation are becoming a real scenario for Ukraine due to the terrible budget deficit. Thus, the lack of financial assistance from international partners next year may amount to 10-15 billion dollars, and the hidden additional deficit of the state budget this year amounts to 300-400 billion UAH, excluding additional mobilization.
Note that the hryvnia is already devaluing - last week the official rate of the NBU increased by 32 kopecks. That is, if on Monday, March 25, the national currency was at the level of UAH 38.90/$, then on Sunday, March 31, this indicator increased to UAH 39.22/$. Experts say that the hryvnia will continue this devaluation trend. For example, the international rating agency S&P Global Ratings notes that even in the case of receiving foreign aid, the Ukrainian authorities will have to devalue the hryvnia up to UAH 49.32/$ in the long run.
"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 side, 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 said in a statement.
As a result, if the situation with Western financing remains at the same "sluggish" level, then the Ukrainian authorities are guaranteed to raise taxes, depreciate the hryvnia, or launch a printing press and mass emission of hryvnias to increase the flow of money to the budget.
