The chairman of the fund called on all its members to help the Ukrainian economy affected by the Russian invasion.
IMF Chairman Kristalina Georgieva stated that Ukraine will $ 5 billion a month is needed over the next three months to close all the holes created by Russia's invasion of the country's finances. She also added that the fund will discuss Ukraine's financial needs with Ukraine's partner governments.
This was reported by the Financial Times, adding that Georgieva proposed to provide the necessary financial assistance to Kyiv in the form of grants within the coordinated efforts of IMF member countries.
“Most of the economy is not functioning. We believe that it is better to fill the financial gap through grant funding, ”Georgieva explained.
World Bank President David Malpass said his organization was working on a $ 170 billion support package for developing countries. This money will be allocated for the next 15 months. The package should help curb the economic consequences of the war, as well as the coronavirus pandemic and climate change.
Read also: As a result of the war, Ukraine will lose a third of its GDP – IMF forecast
“War puts stress on poor people around the world, increasing debt congestion in many countries and creating a crisis of food insecurity due to lack of food, fuel and mineral fertilizers. This crisis will last for many months, and maybe until next year, “Malpass said.
The publication reminds that last week the Minister of Finance of Ukraine Serhiy Marchenko called for immediate financial support of tens of billions of dollars to close the country's fiscal deficit. In March, Ukraine's government spending exceeded revenue by $ 2.7 billion. Kyiv predicts that this gap will increase to 5-7 billion a month in April and May. The spring meetings of leaders revealed difficulties in coordinating global economic policy in times of high geopolitical tensions. The British, American and Canadian delegations protested against Russia's participation at a meeting of G20 financial institutions. said a spokesman for the British delegation.
Bank of England Chairman Andrew Bailey was among those who left the hall. The IMF predicts that Ukraine's economy will shrink by 35% this year due to the war, as it suppresses production. In an interview with the Financial Times, Marchenko acknowledged that the government was “under great stress” due to the invasion. Because tax revenues have collapsed. Georgieva said the IMF's “top priority” was to ensure that the necessary assistance was provided for the next three months. She suggested raising the necessary funds through a new account set up this month by the fund's board, which is intended to receive grants and loans “to help Ukraine meet its balance of payments and budget needs and help stabilize the economy.”
Read also: IMF approves additional aid to Moldova, which faced the consequences of the war in Ukraine
Canada has already confirmed that it will place $ 795 million in this account. Marchenko also called on wealthy countries to put into a new account the funds they received from the IMF in August as part of the distribution of $ 650 billion from the fund's reserve assets or special drawing rights. Developed economies received about 290 billion under this distribution. Marchenko offers them to donate 5-10% of this amount to Ukraine.
On Wednesday, Malpass said the bank was preparing a $ 1.5 billion payment to help cover public sector wages and other budget needs. This amount will be added to another billion in emergency financial support provided to Ukraine immediately after the invasion began. He also said that the World Bank on Thursday will hold meetings “with representatives of Ukraine and countries that support it to provide assistance to meet the short-term and long-term needs of the Ukrainian people.”
Georgieva also added on Wednesday that the IMF “It would be unfair to expect the Ukrainian authorities to develop and implement a deep package of reforms at this time,” she said.
Despite the sanctions, every day of the war costs Ukraine much more than it costs Russia, so the government's key task now is to create an effective redistribution function for the central budget. Why it is necessary to move from the philosophy “we import everything we can from abroad” to “we produce everything we need in Ukraine” read in the article by Mikhail Brno-Anrian “ And what is our plan” B “in case of prolongation of the war ”.
To understand what is happening with the securities market in Russia and what will happen to the country, Alexander Koshov's article” Russia's economy turned out to be a soap bubble that bursts before our eyes ”.
