• 11/25/2024

Ukraine may raise taxes if it doesn’t get US financial aid – Bloomberg

Pravda Ukraine

Ukraine is developing a plan to help it obtain the necessary funds and cover the budget deficit if US financial assistance is blocked.

Source: Bloomberg, citing its sources

Details: The plan includes three key elements: expanding domestic bond sales, raising taxes, and cutting spending.

Bloomberg noted that Ukrainian officials are due to propose this plan to the IMF during a three-day visit of its staff to Kyiv next week.

“While Ukraine is fulfilling its obligations, the finance ministry and central bank believe there’s a risk that the IMF’s board won’t approve the next loan disbursement without the fiscal plan if US funds are still blocked. Kyiv has been scheduled to receive $5.3 billion from the IMF program this year,” Bloomberg reported.

Bloomberg stated that the primary source of funds to replace US funding is the expansion of domestic government borrowing. Ukrainian banks have high levels of liquidity, and the government expects them to continue investing in high-yield government bonds.

This could bring in at least US$5 billion in revenue this year. The government can also raise taxes or cut spending if necessary.

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https://www.pravda.com.ua/eng/news/2024/02/9/7441133/