Ukraine’s budget indicators can recover after 5-10 years, but only after war ends, says Finance Minister

Defend against Russia war consumes a lot of resources and will not allow Ukraine to return to the low level of debt that Ukraine’s GDP had before the large-scale invasion or become less dependent on foreign aid, Finance Minister Serhiy Marchenko said in response to a question from Kyiv Post during his press conference. briefing on Thursday.

Ukraine’s state budget deficit was only 3.8% of GDP, while during the large-scale invasion of Russia it increased to 24%, decreasing to 19% after a successful debt restructuring deal.

“In theory, we reduced the proportion. But as long as the full-scale war continues, returning to ‘peacetime’ indicators, with the pre-war level of debt and budget deficit, is absolutely impossible,” Marchenko said.

He agreed that Ukraine now depends on full financial aid, allocating the volume of 50% of the state budget from external sources – 2.2 trillion grunts (52.38 billion dollars). “A situation like this is not sustainable,” he said.

In times of war it would be impossible to determine when Ukraine economy can become financially self-sufficient, according to the minister.

“We need to determine where the beginning of peacetime is and then understand what the point is for us to say we have enough capacity for the medium term,” he explained.

The ministry’s programs with foreign partners are aimed at helping Ukraine achieve financial independence despite the war.

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The current depreciation of the ruble began in August, along with the increase in the key rate that began earlier to support the difficulties in the Russian economy.

“But again, if we talk about how quickly state finances will adapt in times of war to times of peace, we are talking about a perspective of 5 to 10 years before reaching balanced indicators. “Ukraine’s economy is currently at the maximum level that allows us to finance the Armed Forces,” Marchenko said.