Ukraine’s economy has experienced its sharpest downturn in three decades, financial experts have warned
Prime Minister of Ukraine, Denis Shmigal (L) speaks with President of the European Commission, Ursula von der Leyen on October 25, 2022 in Berlin, Germany © Getty Images / Omer Messinger/Getty Images
Kiev expects to receive at least €18 billion ($19 billion) in foreign aid from the European Union (EU) next year, Ukrainian Prime Minister Denis Shmigal has said. The tranche matches the amount the country will receive from the bloc in 2023.
“EU budget support to Ukraine in 2023 already amounts to 15 billion euros – this is one of the most important factors helping Ukraine be economically resilient and stable,” Shmigal wrote on Telegram on Monday.
Kiev has recently received a sum of €1.5 billion ($1.59 billion) in what was a ninth set of EU financial assistance tranches, he added. Two more payments are expected to be completed before the end of the year to bring the total to €18 billion, according to Ukraine’s finance ministry.
Ukraine has become heavily dependent on foreign financial aid since Moscow launched its offensive in the country in February of last year, as millions of people fled due to the conflict and as logistical and supply chain routes became disrupted. Ukraine’s economy shrank by about one-third in 2022, financial experts said, in what was its sharpest economic downturn in more than 30 years.
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It was announced earlier this year that the Ukrainian government would be funded by a European Commission long-term program, which will see Kiev receive €50 billion in payments between 2024 and 2027.
President of the European Commission Ursula von der Leyen said in June that the funds would “help Ukraine resist the aggression and rebuild a modern, prosperous country.” She added that “Ukrainians are resolutely striving towards Europe, and our Union is supporting this brave nation in its effort.”
However, despite Von der Leyen’s continued support, Ukrainian Finance Minister Sergey Marchenko has warned that it is becoming increasingly difficult to secure key financial support from allies as the conflict drags on.
Marchenko said at the sidelines of the International Monetary Fund (IMF) and World Bank summit in Morocco earlier this month that he was seeing a lot of “weakness among our partners” and believed that some “would like to forget about the war, but the war is still ongoing, full-scale.”
Moscow has repeatedly cautioned that aid sent to Ukraine by the EU and the United States, be it financial or military in nature, will only serve to extend the conflict.
“The US and its allies are trying to prolong the conflict as much as possible,” Russian Defense Minister Sergei Shoigu said in February. “In fact, such steps are dragging NATO countries into the conflict and could lead to an unpredictable level of escalation.”
