The Ministry of Finance does not know what to do with the budget because of the war and IMF requirements
5 June 15:35
The Ministry of Finance is in a difficult situation due to the mismatch between the IMF’s requirements to reduce the budget deficit and the military reality. As a result, the submission of the Budget Declaration is being delayed, as the Ministry cannot decide how to simultaneously fulfill its obligations to the IMF and ensure the financing of the country’s defense. This was stated by the Minister of Finance of Ukraine Sergiy Marchenko during a speech in parliament on Thursday, "Komersant Ukrainian" reports citing Interfax-Ukraine.
According to the official, the problem now lies in difficult negotiations with the IMF on future scenarios and the size of the budget deficit.
“The complexity of the issue of the Budget Declaration now lies in the fact that according to the International Monetary Fund program, next year we need to reduce the deficit to 9.9% of GDP from 19.4% this year under the baseline scenario. This is the baseline scenario,”
– said the Minister in his speech in the Parliament.
Marchenko emphasized the scale of this task:
“If you understand how difficult it is and how serious these figures are, we are talking about hundreds of billions of hryvnias less spending compared to the budget we have now.”
The Finance Minister said that the Ministry had sent a letter to the government and the Verkhovna Rada with explanations and justifications, reminding that the IMF mission had left Kyiv only a week ago.
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The Ministry of Finance is at a crossroads
The Ministry is preparing the Budget Declaration under two scenarios, Marchenko said. The baseline scenario assumes compliance with the IMF requirements and cutting the budget deficit in half. The alternative scenario takes into account the possibility of continuing military operations throughout 2026.
“I hope that all the efforts made by the President and our partners will allow us to get a fair peace. But we need to prepare and be ready for different scenarios. That is why the declaration will be submitted to the government and will be submitted to the Verkhovna Rada in the near future,”
– summarized the head of the Ministry of Finance.
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