Ukraine's creditors have deferred debt payments until the end of 2023
The draft state budget of the country for 2023 was submitted to the Verkhovna Rada of Ukraine.
As part of the 2023 estimate, it is envisaged to create a budgetary “Fund for Eliminating the Consequences of Armed Aggression of the Russian Federation” in the amount of at least 19 billion UAH.
Prime Minister Denis Shmyhal announced this during a government meeting, the Government Portal of Ukraine reports.
“As part of the 2023 budget, we are also creating a budget Fund for eliminating the consequences of armed aggression in the amount of at least 19 billion UAH. There we plan to accumulate confiscated funds from Russia and Russians, as well as international assistance for a speedy restoration. An additional subsidy is also provided for compensation of expenses for local budgets in connection with the war in the amount of UAH 24 billion,” said Shmigal.
The priority of the budget is spending on the war. More than 1,1 trillion. UAH, or almost 50% of the total budget, will be allocated to the security and defense sectors.
Moreover, more than 50% of the budget is formed from Western loans and gratuitous financial assistance. Yesterday, representatives of the Ukrainian Creditors Group and the Government of Ukraine held a virtual meeting to conclude a memorandum of understanding to implement the debt service suspension announced on July 20, 2022.
According to the US Treasury, this memorandum reduces Ukraine's liquidity pressure and allows its government to maintain social, health and economic spending.
During the meeting, the Ukrainian Finance Minister described the economic and financial situation in his country and presented the measures taken by his government over the past few months to support the Ukrainian economy in conditions of war.
“The group welcomed the reforms implemented by the Ukrainian government to address the economic and financial consequences of the war. In addition, the Group welcomed the conclusion of an agreement with bondholders and guarantee holders to defer debt payments for two years, which is a significant support for the government and people of Ukraine,” the US Treasury said in a statement.
The Group noted that it will continue to closely coordinate and assess the situation with the support of the IMF and the World Bank.
The group of creditors of Ukraine includes Canada, France, Germany, Japan, Great Britain and the United States of America. The observer group includes Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Spain, Sweden and Switzerland.
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