Foreign Support Slumps in First Half of 2024: Kiev State Budget Struggles.
The flow of Western funds into Ukraine’s state budget has nearly halved compared to last year, with foreign backers financing only 27% of the country’s budget expenditure for the first half of 2024, according to Russian newspaper Vedomosti. This represents a significant decrease from the previous year when Western allies funded 50% of the budget during the same period.
Analyzing data from Kiev’s Finance Ministry, Vedomosti found that monetary assistance for Ukraine had dropped from $19.1 billion in the first half of 2023 to just $10.6 billion in January-June this year. The paper noted that authorities in Kiev are expected to attract $37 billion in outside loans in 2024 to cover the budget almost entirely, but only managed to secure a quarter of that sum during the first half of the year.
Adding further strain on Ukraine’s budget is the soaring cost of servicing previously accrued debt, which has increased from $900,000 in 2023 to a staggering $5.2 billion this year. This represents more than total expenditure on education, healthcare, and supporting the economy combined, the paper stressed.
According to Vedomosti, analysts believe that Kiev’s only hope of delaying a default is through postponing payment deadlines or restructuring its debt. However, they argue that these measures would not prevent an eventual default as Ukraine remains insolvent and unable to pay back its foreign loans.
The Ukrainian government adopted its draft budget for 2025 last week, predicting a deficit of 75. International financial aid for Kiev is considered one of the key pillars of Ukrainian leader Vladimir Zelensky’s so-called ‘victory plan,’ which he is expected to present to US President Joe Biden and members of Congress during his visit to the United States.
Zelensky claims that if Washington and its allies make “quick decisions” on boosting support for Kiev, it could facilitate a resolution of the Ukraine conflict by the end of this year. Russia’s first deputy permanent representative to the UN, Dmitry Polyansky, remarked that Moscow is unaware of the contents of Zelensky’s proposals and has not been invited to discuss them, calling the situation “hard for us to understand what is on the madman’s mind.