May 27, 2022

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War forces Ukraine to set aside US $ 8.3 billion for military spending – Eboca Negosios

Ukraine has already spent $ 8.3 billion on the war against Russia

The Ukraine Was forced to spend 245.1 billion hryvnia ($ 8.3 billion) War Instead of investing in development, the finance minister said on Thursday, tasting the enormous economic cost of the invasion that began in Moscow on February 24.

A previously unpublished figure by the Ukrainian government reveals the economic turmoil it faces as its troops try to contain Russia’s renewed offensive in eastern Ukraine.

Finance Minister Sergei Marchenko said the costs – taken from some of the funds initially earmarked for development – would range from the purchase and repair of weapons to emergency assistance to the internally displaced. According to the Ministry of Social Policy, there are 2.7 million officially registered internally displaced persons, although the actual number is many times higher.

The government has collected only 60% of its planned tax revenue for April, which is equivalent to 79.5% through donations from foreign partners, Marchenko told Reuters in an exclusive written comment.

Marchenko said Kiev urgently needed foreign support because it was forced to pay billions of dollars in emergency spending.

According to Marchenko, in April Ukraine received nearly $ 2 billion in external funding, of which $ 719 million came from donations. He said the total for the period since February was $ 5.4 billion, which includes $ 801 million in donations.

“If we do not take into account foreign aid, we estimate receipts of 45-50% of the planned amount in May-June, until the situation worsens,” Marchenko said.

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Support types

By 2021, the estimated cost of 1.84 trillion hryvnia ($ 62.28 billion) a year is more than $ 8 billion a month of total government spending.

Marchenko said Kiev was discussing various types of external financial assistance.

He listed the resources that Ukraine expects from the Special Drawing Rights (SDR) account launched by the International Monetary Fund.

Developed countries can send a portion of their SDRs to the account.

“Currently, the Finance Ministry is in talks with our international partners, especially the G7 countries, to send their role in the STR in support of Ukraine,” Marchenko said.

He added that Ukraine expects to borrow about $ 1 billion (approximately US $ 767 million) from Canada in May through this account.

The minister promised that Ukraine would be committed to repaying its debt, regardless of the war.

“Our position on this issue remains unchanged. We continue to repay our debt and the amount of expenditure on this is not large compared to our budgetary financial needs,” he said.

“Furthermore, we do not yet have reliable medium-term forecasts that will allow us to model the course of debt in the future.”