The funds will be used to pay pensions and social assistance
The Ukrainian Ministry of Finance received a $3 billion grant from the United States to finance state budget expenditures. The funds were provided through the World Bank’s trust fund within the framework of the project “Supporting public expenditures to ensure sustainable public administration in Ukraine.”
Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on finance, tax and customs policy, reported about it on his Telegram-channel.
This is the first tranche of $4.5 billion that will be provided by the United States within the framework of the specified financing mechanism. The funds will be used to pay pensions, social assistance, including the payment of housing and communal services and support of low-income families, disabled people, immigrants, etc.
“Grants are non-refundable financial assistance used to finance budget needs. Such assistance is included in budget revenues and, unlike soft loans, does not lead to an increase in the level of public debt and debt risks, which have increased due to the war,” Danylo Getmantsev wrote.
According to him, in the first half of 2022, the direct and guaranteed public debt increased from $98 billion to $105.4 billion. During this time, the debt burden increased from 49% of GDP to 68% of GDP and, according to IMF forecasts, may increase to 86% of GDP by the end of the current year.
As GMK Center reported earlier, as of the mid-June, international partners have transferred $7.4 billion to Ukraine to cover the state budget deficit, and the total amount of declared financial aid to Ukraine as of mid-June was $30 billion. Up to a third of them are non-refundable grants.
According to the NBU, about two-thirds of the expected international assistance is soft loans from partner countries and international financial organizations. Although they are provided for a long time and at low interest rates, such loans carry currency risks in the future, according to the National Bank.