Ukraine’s economy should stabilize this year and grow by up to 15.5% in 2023, depending on military events in the country’s war against Russia, the country’s economy minister told Reuters in an interview.
Yulia Svyrydenko, first vice prime minister, said government officials were generating macroeconomic estimates ahead of the start of talks with the International Monetary Fund on a new credit package next month.
In the basement of the Cabinet of Ministers, surrounded by sandbags amid intensified warnings of possible assaults on Kyiv, Svyrydenko said current projections for GDP in 2023 ranged from a further reduction of 0.4% to an expansion of 15.5%, following a predicted fall of 30-35% this year.
“We understand that we have to keep the economy moving. It’s very hard to make new forecasts because of the uncertainty. It fully depends on the military scenario,” Svyrydenko added.
While Svyrydenko declined to say how much Ukraine will ask the IMF for, she said say the new program should be “relatively large” and agreed on fast to free up funds from other creditors and reassure investors.
According to Oleg Ustenko, a senior economic adviser to President Volodymyr Zelenskiy, an IMF loan of $5 billion over 18 months may serve as an anchor for a larger package of $15 billion to $20 billion from other creditors.
That was roughly the sum named by Ukraine’s central bank governor, Kyrylo Shevchenko, as a target for IMF assistance over two or three years, though analysts said such a huge amount would put Ukraine well above the fund’s “exceptional access limit” for loans.
LOOMS IN THE WINTER
Ukraine’s previous $5 billion IMF loan agreement was canceled in March after the IMF provided $1.4 billion in emergency financing with few limitations in the early weeks of the war, which Russia refers to as a “special military operation”.
Ukraine, which is dealing with the internal displacement of 7 million people as well as the loss of millions more who have fled to Europe, is bracing for a harsh winter characterised by energy shortages, soaring inflation, and a deteriorating humanitarian situation.
Svyrydenko also asked donor countries and institutions to follow through on their aid pledges.
Since Russia’s invasion, Ukraine has received $12.7 billion in international budget support from various nations and institutions, and she expects another $14 billion in already pledged aid to arrive before the end of the year.
“It’s very important for us to keep getting this financial aid – and aid in general – from our partners,” she said.
“We’re fighting for values that are important for Europe and the United States.”