Page 39 - UKRRptSept22

6.0 Public Sector 6.1 Budget
Ukraine’s dire financial situation is looking better with allies finally delivering on promised funds and a healthy predicted revenue from the grain corridor in the Black Sea allowing Ukraine to export its agricultural products.
The latest prediction from the Ministry of Agrarian Policy states that Ukraine will receive $20bn in grain export revenue this year, Ukraine Business News reported on August 10. This comes after Moscow and Kyiv agreed to the ‘Black Sea Initiative' last month, unblocking three Ukrainian ports. Already Ukraine has managed to export 243,000 tonnes of corn via seven ships since August 1 and Deputy Minister of Agricultural Policy Taras Vysotsky predicts that 3-3.5mn tonnes of grain will be exported from the three operational ports each month.
This is certainly an optimistic indicator that will not only help Ukraine’s devastated agricultural industry but also the global food crisis. Immediately after the first ship left the Odesa port on August 1, September wheat futures fell 2.4% to $788.50 a bushel on the Chicago Board of Trade.
Following a thinly veiled jab from Ukrainian President Volodymyr Zeleskiy last week, Germany has stated that it will release €8bn in EU aid to Ukraine, Ukraine Business News reported on August 9. Berlin had blocked the vital funding due to alleged concerns over accountability and corruption, whilst Ukraine suffered from a deficit of between $4bn and $5bn a month, leading Zelenskiy to label Berlin’s actions as “either a crime or a mistake”.
The EU signed off on €9bn in macro-financial assistance for Ukraine in June, however, Kyiv has only received €1bn so far. German Finance Minister Christian Lindner claims Germany will help Ukraine receive the remaining €8bn in macro-financial assistance. The money is expected to come next month after the negotiations.
In addition, Ukraine also sent a letter to the IMF on August 5 proposing a new special programme. Prime Minister Denys Shmyhal announced that Kyiv expects to receive the assistance in November or December this year, Ukraine Business News reported on August 9.
Ukraine’s budget is looking more optimistic. Earlier this week, the United States announced it will provide financial assistance totalling $5.5bn. This includes $4.5bn for urgent budgetary needs and $1bn in military support.
Ukraine is rapidly running out of money and with rising food instability, damage to infrastructure and a fuel crisis, Ukraine’s war-weary population is struggling with basic necessities. The foreign funding will be used to help pensions, social welfare and healthcare- areas that require crucial attention.
The National Bank of Ukraine (NBU) predicts a 2022 drop in GDP of more than a third and an increase in inflation to more than 30%. As such, as much as
39 UKRAINE Country Report September 2022 www.intellinews.com