The Wall Street Journal reported that Ukraine is facing significant financial difficulties, especially in bridging the gap between military spending and declining tax revenues.
The newspaper pointed out that the Ukrainian Central Bank is forced to print money so that the government can pay salaries to the military and buy weapons and equipment, which weakens the national currency and leads to high inflation.
The newspaper quotes Ukrainian Finance Minister Serhiy Marchenko as saying that “every day and night is a constant problem” in finance.
The Ukrainian government expects gross domestic product to decline by about 30% compared to last year.
Currently, tax revenues cover only 40% of budget expenditures, while military spending accounts for more than 60% of budget expenditures.
The Minister of Finance of Ukraine indicated that the government has reduced non-military spending to a minimum.
Kyiv needs about $5 billion a month to cover non-military expenses.
The support that the Western countries promised to provide turned out to be insufficient, since the total amount of aid promised this year amounted to about $30 billion.
Marchenko urges Western governments to provide support more quickly: “The support we’re getting now allows us to win this war and end it faster. Without this money, the war will last longer and cause more damage to the economy,” he said.
Ukrainian officials have indicated that the US and UK are keeping their promises of support, while deploring divisions within the EU on this issue, especially divisions between Germany and the European Commission.
Ukraine has so far received only 1 billion euros out of the 9 billion promised by the European Union.
This comes against the backdrop of an agreement by the creditor countries to defer Ukraine’s debt repayment for two years, which will give Kyiv about $5.9 billion over the next two years.
Source: The Wall Street Journal.