Ukraine faces worst budget outlook since 2022 as 2027 funding gap hits $32.6 bln – Finance Minister

Ukraine is bracing for its worst budget outlook since 2022, with a projected funding gap of $32.6 billion for 2027, Finance Minister Serhiy Marchenko revealed in an interview with Euronews. The unmet need for external financing remains approximately $50 billion annually. Marchenko warned that the country may need to reduce non-military expenditures unless it can secure funding from allies, urging European ministers to think creatively to address the crisis.

He expressed concerns over potential liquidity issues and budget shortfalls, which could force the government to delay non-war-related payments, affecting local infrastructure projects like shelter construction. Marchenko is currently working on a new budget, assuming the war will persist into 2027, with the International Monetary Fund (IMF) also estimating a similar funding shortfall.

The IMF recently visited Kyiv, confirming the gravity of the situation. Marchenko called for innovative solutions, including the revival of a plan to utilize approximately $300 billion in frozen Russian assets, which was previously rejected by EU ministers. However, a group of EU countries, including Sweden, has recently revived the plan, shifting custodianship of the assets held in Belgium to distribute legal risks among the 27 member states.