• 21/02/2024 00:25

The National Bank predicts a reduction in assistance from partners in 2025-2026

The National Bank expects a significant reduction in financial assistance to Ukraine from international partners in 2025-2026. This is discussed in the NBU inflation report.

The National Bank predicts a reduction in assistance from partners in 2025-2026

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International assistance

The NBU’s basic forecast for 2024 provides for the receipt of $37.4 billion in financial assistance from partners. In 2025, this amount will decrease to $25.1 billion, in 2026 – $12.6 billion.

International assistance will remain a significant source of covering the budget deficit even under the base scenario (which assumes a significant reduction in military operations from 2025), the reduction in funding from partners will not create risks for the sustainability of public finances, because this process will be gradual, according to the National Bank. If the assumption of war is justified, the budget deficit in 2025-2026 will decrease to 13.5% and 7.5% of GDP, respectively.

However, the situation with financial assistance from partners will remain one of the key risks. Failures in the flow of assistance or a reduction in its volumes “will significantly undermine the stability of public finances, which may worsen macroeconomic stability,” the NBU points out.

If the risks of reducing assistance are realized, this will have a negative impact on the volume of gold and foreign exchange reserves of the NBU, which will worsen exchange rate and inflation expectations, the report says.

minfin.com.ua

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