
‘Survival on pennies’: more than half of Ukrainian pensioners receive less than 97 euros per month
January 17, 2024
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January 17, 2024Ukraine’s hard-won economic stability is once again under threat, as the Ukrainian government faces a significant budget gap, and its major allies and sponsors—the United States and the European Union—have yet to decide on providing additional assistance.
The Independent reports on this development.
In the initial months of the conflict in 2022, the country lost a third of its economic production, and inflation soared to a staggering 26%. To cover budget shortfalls, the National Bank of Ukraine had to print money. With regular financial assistance from Western allies last year, the situation improved: inflation dropped to 5.7%, and the economy grew by 4.9%. Ukraine managed to halt the practice of money emission while keeping the banking system functioning and schools and medical institutions open, and continuing pension payments.
However, since Ukraine allocates almost all its tax revenue to fund military actions, a substantial deficit emerges, considering the need to pay pensions and salaries to teachers, doctors, and government employees. Without regular Western aid, Kyiv may have to resume issuing new currency, potentially leading to inflation and real poverty for Ukrainians.
Currently, Ukraine is significantly poorer than European countries. Approximately 80% of the population can only afford food and medication. The only way to afford items like clothing or footwear is by cutting back on food and medicine expenses.
The budget for Ukraine this year includes $41 billion in aid to cover the deficit and avoid money emission. Ukraine is counting on $8.5 billion from the U.S. and $18 billion from the EU. According to experts, the country needs the funds by the beginning of March. However, as noted by The Independent, the situation regarding the allocation of these funds remains uncertain.