Ukraine Requires $42 Billion Foreign Aid in 2024 Amid High Defense Spending

Ukraine's Finance Minister, Serhii Marchenko, has disclosed that Ukraine will necessitate a minimum of $42 billion in foreign financial aid for the year 2024.

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Ukraine's Finance Minister Serhii Marchenko at the Ukraine Recovery Conference in London, UK, on Wednesday, June 21, 2023. (Photo credit: Chris J. Ratcliffe/Bloomberg via Getty Images)

Ukraine’s Finance Minister, Serhii Marchenko, has disclosed that Ukraine will necessitate a minimum of $42 billion in foreign financial aid for the year 2024. The increased expenditure on defense and security has prompted this demand. Marchenko clarified the situation in an interview with Radio Free Europe on August 9. He emphasized that the planned budget for the security and defense sector for 2024 aligns with the 2023 levels.

The minister acknowledged that while financing for 2023 has been secured, confirmation for the subsequent year is pending. Notably, the anticipated financial assistance encompasses a $55 billion aid package from the European Union over a four-year period. This initiative has garnered support, including prospects of backing from the International Monetary Fund and the United States.

Despite these positive prospects, the EU’s proposition encountered opposition from Hungary, posing a challenge to the assistance package. Marchenko stressed that Ukraine must demonstrate its capacity to utilize internal resources for successful negotiations, aiming to generate approximately Hr 1.3 trillion ($35 billion) in tax revenues.

Ukraine’s commitment to bolstering defense and security is evident as Prime Minister Denys Shmyhal announced intentions to allocate Hr 1.8 trillion (approximately $48 billion) from the state budget to these sectors in 2023. This move reflects the nation’s response to not only the escalating defense expenses due to the full-scale Russian invasion but also the reconstruction and recovery costs.

In a separate assessment, the World Bank projected that Ukraine’s future recovery will demand at least $411 billion, a figure surpassing 2.6 times the projected gross domestic product for 2022. The financial aid for 2024 is therefore considered crucial to help Ukraine navigate these multifaceted challenges effectively.

Sri Lanka Guardian

The Sri Lanka Guardian is an online web portal founded in August 2007 by a group of concerned Sri Lankan citizens including journalists, activists, academics and retired civil servants. We are independent and non-profit. Email: editor@slguardian.org

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