Ukraine Will Need $5 Billion Monthly To Keep Economy Functioning

Ukraine will need an estimated $5 billion per month to cover essential government services and keep its economy functioning, according to head of the International Monetary Fund (IMF).

“Kristalina Georgieva, the IMF’s managing director, said at a news conference that the estimate for the next three months was conveyed by Ukraine’s finance ministry officials, ahead of this week’s meeting of the IMF and the World Bank,” The Wall Street Journal reported. “Financial support for the countries affected by the war in Ukraine is among the main topics for finance ministers and central bankers gathered in Washington.”

“The budgetary shortfall results from a plunge in the country’s tax revenue to roughly half of its prewar level, as well as increased spending to cover urgent needs such as caring for wounded soldiers and displaced citizens,” the outlet continued. “Ms. Georgieva added that the estimate doesn’t include what will be a massive cost for the country’s reconstruction after the war.”

The IMF also projected on Monday that Ukraine’s economy will contract by 35% this year, and the damage the country has already suffered as a result of the Russian invasion will severely hinder its economic activity for many years.

“A big part of the economy is not functioning,” Georgieva said, according to The Wall Street Journal. “Therefore, filling this financial gap is best done by relying on grant financing.”

The news comes the week after President Biden announced an additional $800 million in weapons and other military aid for Ukraine, and as the Biden administration is reportedly considering sending another $800 million to the country this week.