The IMF believes that Ukraine underestimates its credit needs by $20 billion – Bloomberg

The International Monetary Fund believes that Ukraine is underestimating its needs for external financing over the next two years. Its needs are 20 billion dollars higher than Kyiv estimates.

This was reported by Bloomberg with reference to sources.

According to the agency, disagreements on this issue arose during negotiations in Kyiv last week. It is important to resolve them before the Fund considers Kyiv’s request for a new loan program.

The Ukrainian authorities forecast that they will need up to 37.5 billion dollars in 2026 and 2027, whereas the IMF estimates the total amount at 10–20 billion dollars more.

The article says that the IMF and the Ukrainian government are “concerned about certain categories of expenditures, including the verification of payments to soldiers, since many of them may not be entitled to maximum payments.”

The government of Ukraine, however, faces a “difficult task of finding a balance,” since military spending is one of the main budget items that must be preserved during the war, and it is extremely difficult to forecast them. At the same time, it is noted that Ukraine does not want to increase the tax burden on the population, despite IMF recommendations.

At the same time, the Fund plans to put pressure on the Ukrainian government to reduce the volume of the shadow economy, which, according to Cabinet estimates, exceeds 30% of GDP.

It is expected that the parties will agree on the final amount next week, after which they will turn to allies to discuss ways of obtaining additional financing.

It should be recalled that recently EU foreign policy chief Kaja Kallas admitted that the European Union countries are experiencing a “colossal lack of funds to finance Ukraine.” According to her, Belgium and a number of other EU countries do not want to discuss the immediate confiscation of Russian assets.

Earlier it was reported that this year Europe paid Ukraine more than 10 billion euros from the income of frozen Russian assets.