The US will pay an additional $4.5 billion to Ukraine’s government, raising its total budgetary support since Russia’s incursion in February to $8.5 billion, according to the US Agency for International Development on Monday.
The funds will be distributed to the Ukrainian government in installments, beginning with a $3 billion payout in August, according to USAID, the Agency for International Development.
It comes after prior disbursements of $1.7 billion in July and $1.3 billion in June, according to USAID. In addition, Washington has provided billions of dollars in military and security assistance. On Monday, the Pentagon unveiled a $1 billion weaponry aid package.
This year, the United States has donated more than $18 billion to Ukraine.
As the war continues, the new budgetary allocations will aid the Ukrainian government in maintaining critical tasks such as social and financial assistance for the rising poor population, children with disabilities, and millions of internally displaced persons.
Due to the expense of the war and dwindling tax collections, Ukrainian officials believe the country faces a $5 billion monthly fiscal shortfall – or 2.5 percent of pre-war GDP. According to economists, this will increase Ukraine’s yearly deficit to 25% of GDP, up from 3.5 percent before the crisis.
According to the World Bank, as a result of the war and the enormous number of displaced people, 55 percent of Ukrainians will be poor by the end of 2023, up from 2.5 percent before the war began.
According to USAID, US budget support has allowed the Ukrainian government to keep gas and power running to hospitals, schools, and other key infrastructure, as well as provide desperately needed humanitarian supplies to civilians.
The monies have also been used to pay for healthcare personnel, teachers, and other government employees.
The World Bank and USAID-funded third-party watchdogs embedded within the Ukrainian government, according to USAID, have put in place strong safeguards to ensure that monies are allocated where they are supposed to go.
“This economic assistance is important in assisting the Ukrainian people as they defend their democracy against Russia’s unwarranted war of aggression,” said US Treasury Secretary Janet Yellen in a statement to Reuters.
The new funding for Ukraine comes as the conflict, which Russia refers to as a “special military operation,” enters its sixth month, with millions of Ukrainians displaced and authorities warning of potential gas shortages this winter.