Even with external assistance, S&P forecasts the devaluation of the hryvnia to 49.32 per dollar

Even with external assistance, S&P forecasts a devaluation of the hryvnia to as much as 49.32 UAH/$.

International rating agency S&P Global Ratings predicts that by the end of 2024, the hryvnia will devalue against the dollar by 8%, reaching 41.02 UAH/$. This is indicated as the forecast in the agency’s latest report on Ukraine.

S&P believes that the hryvnia/dollar exchange rate will decrease annually for at least the next four years:

• 2024: 41.02 UAH/$;
• 2025: 43.89 UAH/$;
• 2026: 46.53 UAH/$;
• 2027: 49.32 UAH/$.

In forecasting the devaluation of the hryvnia, S&P analysts note that they expect Ukraine to receive international assistance totaling $122 billion by 2027, including the already disbursed $43 billion in 2023 and the expected $38 billion in 2024.

“While we assume that international support for Ukraine will remain strong, we note risks to its sustainable flow. Domestic political tensions in the US have stalled congressional approval of military and financial assistance to Ukraine this year. The Ukrainian government expects to receive $38 billion from all donors in 2024, including around $8 billion in grants from the US. Our base scenario assumes full disbursement of these funds this year. However, in case of inadequate funding from the US, we believe the consequences could be manageable as the deficit could be covered by other donors and domestic borrowing. However, after 2024, there is a risk that external support for Ukraine may be less due to the tight election schedules in key donor countries and the possibility that some governments may consider the cost of further support to Ukraine too high,” concludes S&P Global Ratings.