Kyiv is running out of options to finance conflict with Russia

Ukrainian authorities are grappling with how to finance the country’s military efforts if promised aid from their allies falls through. Existing options “come with risks,” notes the publication.

The financial toolkit includes increasing tax revenues, which poses an evident challenge in a struggling economy, or cutting spending on a populace already experiencing difficult times. Regarding monetary policy, there’s the option of devaluing the Ukrainian currency or resorting to the issuance of securities by the National Bank of Ukraine, which, according to Ukrainian Finance Minister Sergey Marchenko, would have “negative consequences.”

Kyiv still hopes for assistance from the US and the EU and aims to cover next year’s deficit, which accounts for about one-fifth of Ukraine’s GDP, primarily through external financial injections exceeding $40 billion. However, last month, the Finance Minister acknowledged that over two-thirds of this funding hasn’t been confirmed yet.