Ukraine needs to raise more than $9bn in international aid by the end of the year to fund the budget, the National Bank of Ukraine (NBU) said on November 6, and expects a gradual decrease in assistance over the next two years.

The NBU predicts that while the country will have received over $45bn in international financial aid this year, that figure is expected to decline to $38.5bn in 2024 and further to $25bn in 2025.

Ukraine’s Finance Minister Serhiy Marchenko said the same day that Ukraine will face a $29bn budget deficit next year if international funding dries up. As bne IntelliNews has reported, growing Ukraine fatigue  means Ukraine’s funding is increasingly in doubt.

Marchenko emphasised the importance of maintaining macroeconomic stability without which Ukraine may face an economic crisis, with consequences not only for Ukraine but which will also affect the EU.

The US has already cut macroeconomic support to Ukraine in the currently proposed funding package by 20% that has yet to be approved by Congress. The EU has also promised a four-year €50bn macro support package, but Hungary and Slovakia oppose further financing for Kyiv, citing corruption problems.

Marchenko noted that Ukraine is ready to enact further reforms and step up its fight against corruption, but more financial help is needed immediately.

In the meantime, Ukraine is working actively with the International Monetary Fund (IMF) as part of its $15.6bn Extended Fund Facility (EFF) programme that was approved in April and is set to conclude in 2027.

During the first ten months of this year, Ukraine received external financing totalling more than $35bn, equivalent to an average of $3.4bn per month. However, the government still requires an additional $9-9.5bn before the end of the year to meet its budgetary needs.

The largest contributors to Ukraine's international financing, comprising 96% of the total, are as follows:

• European Union (EU) - $16.25bn
• United States (US) - $10.9bn
• International Monetary Fund (IMF) - $3.56bn
• Canada - $1.76bn
• Japan - $1.5bn

Loans constitute the majority of international financing, accounting for 68.7% of the total, while grants make up the remaining 31.3%.

On November 6, the IMF mission began discussing the second review of the EEF programme with Ukrainian authorities, the IMF Resident Representative to Ukraine, Vahram Stepanya, said reports UBN.

The NBU clarified that during the second review of the EFF programme, the status of Ukraine's fulfilment of its obligations under the Memorandum on Economic and Financial Policy will be reviewed.

These include measures in fiscal and budgetary programmes, monetary and currency policy, financial stability, and structural reforms for medium and long-term economic growth.

One of the main issues being considered is what financing sources are available to fund Ukraine's state budget deficit, including international financial assistance and the domestic debt market.

“The review will not be easy, but the Ukrainian team has been working effectively for more than 20 months of the full-scale war. We are aware of the critical need to maintain the IMF's support not only for further financing of budget needs but for the development of our country," said NBU chairman Andriy Pishnyi.