Ukraine's external budgetary financing needs 'fully secured' for 2025, Shmyhal says

Ukraine's external financing needs to cover the country's budgetary deficit are fully met for 2025, Prime Minister Denys Shmyhal said on May 6.

"We are covering the budget deficit with the help of partners, as well as through domestic borrowing. Importantly, the entire need for external financing for this year — over $39 billion — is fully secured," Shmyhal said during a meeting to discuss the budget.

Ukraine received around $24.7 billion in direct budget support from international partners in 2024. Ukraine's Finance Ministry warned last year that the country would need additional external budget support by $12-15 billion to keep up with demand.

Western allies and international institutions have continued to support Ukraine with international aid since the start of Russia's invasion to make up for the country's increased budgetary expenditures.

In June 2024, Group of Seven (G7) members agreed to provide Kyiv with a $50 billion Extraordinary Revenue Acceleration (ERA) loan, which will be repaid with proceeds from the frozen assets.

Western nations froze around $300 billion in Russian assets after Moscow launched its full-scale invasion of Ukraine in February 2022, with roughly two-thirds held in Europe.

Kyiv has been urging its foreign partners to confiscate the assets and funnel them to Ukraine's defense and reconstruction efforts, but Western leaders have been hesitant to take the step, fearing legal, political, and economic pitfalls.

While 26% of Ukraine's fiscal budget goes towards funding its military, Shmyhal noted additional announcement for Ukraine's healthcare and education sectors.

Shmyhal previously warned that the period from 2026 to 2027 will pose significant challenges to Ukraine's macro-financial stability, underscoring the need for long-term solutions

As Russia's invasion of Ukraine continues, the country direct losses stemming from damage incurred continue to mount. At the end of December 2024, total losses reached $176 billion compared to $152 billion in February 2023.