Ukraine is developing an action plan for the International Monetary Fund (IMF) aimed at ensuring 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 the visit of the fund's mission to Kyiv, which will last three days and begin on February 12. IMF staff led by Gavin Gray plan to visit the capital.
Although Ukraine is fulfilling its obligations, the Ministry of Finance and the National Bank believe that there is a risk that the Board of Directors of the IMF will not approve the next tranche of the loan without a fiscal plan, if the American funds continue to be blocked.
This year, Kyiv should receive $5.3 billion under the IMF program.
It is important to emphasize that the main source of substitution for American aid is the expansion of domestic public borrowing. Ukrainian banks have a high level of liquidity, and the government is counting on their willingness to invest in high-yield government bonds.
“It could generate at least $5 billion in revenue this year. The government can also consider raising taxes or reducing spending if necessary," the agency emphasizes.
