US$25 billion in 2025: Ukraine's National Bank expects reduction in financial assistance from partners

The National Bank of Ukraine (NBU) expects that international financial support for Ukraine will remain, albeit in smaller volumes.

Source: This is stated in the NBU inflation report for January 2024.

Quote: "Thanks to the foreign support and consistent policies of the NBU, Ukraine's international reserves in 2023 increased by 42% and reached US$40.5 billion.

International aid will remain the main source of capital inflows into the country in the future. Despite delays in the flow of international assistance at the beginning of the year, it is expected that its rhythm will be restored in the coming months," the report says.

According to the baseline scenario of the NBU forecast, Ukraine will receive about US$37 billion in external loans and grants in 2024.

"As security risks are expected to decrease in the coming years, Ukraine will regain the ability to independently finance its own needs, resulting in a gradual reduction in official external financing (to approximately US$25 billion in 2025 and US$12 billion in 2026).

At the same time, this assistance will be sufficient to maintain adequate levels of international reserves. It is predicted that their volume will fluctuate between US$37 and US$42 billion during 2024-2026, which will be sufficient to ensure exchange rate stability," the NBU added.

The National Bank predicts that international support, in addition to domestic market attraction, will allow the government to finance its remaining significant fiscal needs.

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