The full-scale Russian invasion of Ukraine has cost the country a third of its GDP, National Bank of Ukraine (NBU) chairman Andriy Pyshnyi in an interview on Ukrainian TV channel We are Ukraine on Jan. 7.

“Ukraine’s critical dependence on international financial assistance remains,” noted Pyshnyi.

“This source is fundamentally important for us, as the full-scale invasion has caused Ukraine to suffer losses of a third of its GDP, 20% of its territory, and the largest migration outflow since World War II.”

Despite the economic damage suffered by the country, the NBU did not issue new hryvnias to cover the budget deficit in 2023.

“We made it through 2023 without issuing new hryvnias,” said Pyshnyi.

“The budget deficit was financed not by printing money, which was a strategic goal set by the NBU team.” 

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Pyshnyi hopes that 2024 can also be managed without printing more money, while in 2022, the Bank issued 400 billion UAH (approximately $13.6 billion).

Ukraine resumed the operation of its domestic debt market in 2023. This move was very important, as internal state debt bonds, including military ones, are the source for financing budgetary needs, according to Pyshnyi.

Last year’s domestic borrowing volumes were twice as high as in 2022. The revival of domestic borrowing and a series of other prepared measures allow the NBU to discuss the existence of a “Plan B” for the Ukrainian budget.

Ukraine faced a record state budget deficit in the second year of the full-scale invasion, according to previous NV reporting.

The deficit in Dec. 2023 reached a record 285 billion UAH (approximately $9.7 billion) compared to 145.1 billion UAH (approximately $3.8 billion) in Nov. and 98.4 billion UAH (approximately $2.6 billion) in October.

Ukraine’s state budget deficit exceeded 400 billion UAH (approximately $13.6 billion) in June 2023.

The need for international financing in 2024 has been reduced from $41 billion to $37.3 billion USD.

Fitch Ratings, an international rating agency, forecasts that the volume of international assistance in 2024 will be not much lower than in 2023.

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