Government spending exceeded revenue by about $ 2.7 billion in March, and Ukraine expects the gap to widen to $ 5-7 billion a month in April and May due to the war. Ukraine’s gross domestic product amounted to $ 164 billion in 2021. “We are under a lot of stress, at worst [financial] situation “, said Sergii Marchenko in an interview with the Financial Times. “Now it is a matter of survival of our country.” “If you want us to continue to fight this war, to win this war. . . then help us “. Marchenko painted a bleak picture of the damage to Ukraine’s economy caused by the large-scale Russian invasion in late February. Damage to civilian and military infrastructure has so far been estimated at $ 270 billion, he said, with nearly 7,000 residential buildings damaged or destroyed. If you want us to continue to fight this war, to win this war. . . then help us Although Ukraine has received significant military assistance to defend itself against Russia, the government wants its Western partners to provide financial assistance and approve emergency loans from the IMF and the World Bank. About 30 percent of Ukrainian companies had stopped all operations and 45 percent were working at reduced capacity, he said. Electricity consumption decreased by 35%. Trade had collapsed, with exports halving between February and March and imports falling by more than two-thirds. The Kyiv School of Economics on Monday estimated the total financial losses from the war at up to $ 600 billion. Marchenko demanded that Russia pay compensation for “the destruction of private and public property” during the war, and said that Kyiv had assembled an international legal team to file claims against Moscow. But the priority was short-term financing. As Ukraine tries to reduce its budget deficit, the government had already cut spending more than $ 6 billion, but it was not enough, the minister said. “We can cut some costs, but it can not fill the gap,” he said. Sergii Marchenko, Minister of Finance of Ukraine: “Many politicians advise us to speak [debt] restructuring but this is not our policy “© Ministry of Finance of Ukraine Revenues exceeded half the pre-war level, he added. The budget deficit in 2022, which was projected at 3.5 percent of GDP before the Russian invasion, will amount to “multiples” of that depending on the duration of the war, he said. The government has continued to meet its key obligations to pay public sector salaries and pensions and service its debts, he said. The country paid $ 292 million last month for a Eurobond in dollars ending in September and will continue to meet its obligations to avoid bankruptcy or restructuring, he added. “Many politicians advise us to talk about restructuring, but that is not our policy,” he said. Ukraine wanted to have access to both favorable and trade finance and to be able to continue to issue external debt. The government was in talks with the United States to secure guarantees that would allow it to issue government bonds at interest rates lower than what the market is asking for today, which were “much higher than the optimal level to borrow now,” he said. The IMF said on Friday it had opened an account to channel grants and loans to Ukraine to help it “meet its balance of payments and budgetary needs and help stabilize its economy”.

Marchenko called on rich countries to use the account to channel funds they received from the IMF last August, when the IMF allocated $ 650 billion in special drawing rights, or SDRs, a form of reserve assets equivalent to recently cut money. The distribution was intended to help countries deal with the economic impact of the coronavirus. The members of the G7 group of the world’s largest economies received about $ 290 billion from the distribution among the 190 IMF member countries, approximately according to their share in world production. Marchenko urged rich countries to donate or lend between 5 and 10 percent of their funds to Ukraine’s war effort through the new IMF account. “This distribution was not used, many countries just parked it,” he said. “It’s probably the easiest [form of support]. » Last month, the US Congress approved $ 13.6 billion in military and humanitarian aid to Ukraine and other war-torn countries. Although Marchenko welcomed this, he said that Ukraine “will not receive a single cent” as it will be provided in the form of immediate aid and not in cash. “This is not direct budget support. “We can not use it to cover the deficit,” he said.