IMF foresees timeline for end of Ukraine war
Date
12/24/2024 6:57:41 AM
(MENAFN) The International Monetary Fund (IMF) has outlined two potential timelines for the resolution of the Ukraine conflict, predicting that hostilities could end by late 2025 under a baseline scenario, or by mid-2026 if the war persists longer. In its sixth review of Ukraine’s extended fund facility (EFF), published last week, the IMF reported that Ukraine’s Economy remains "stable" and that Kiev is meeting the fund's target indicators. As a result, the IMF approved a $1.1 billion tranche to support Ukraine’s budget, bringing the total financial assistance under the program to $9.8 billion, part of a larger $15.5 billion EFF program running through 2027.
The IMF noted that Ukraine has shown resilience to energy shocks, but expects economic growth to slow in 2024 due to a tight labor market, Russian attacks on energy infrastructure, and ongoing uncertainty about the war. Under the baseline scenario, the IMF projects Ukraine’s GDP will grow by 4% in 2024, with inflation rising to 10%. For 2025, GDP growth is expected to be between 2.5% and 3.5%.
However, in a downside scenario where the conflict continues longer, the IMF anticipates slower GDP recovery, higher inflation, and fiscal deficits exceeding 20% until 2026. The external financing gap is expected to reach over $177 billion, compared to $148 billion in the baseline forecast. Ukraine's 2024 budget deficit is expected to hit a record $43.9 billion, with the country heavily dependent on international aid to meet its financial needs.
Since the war escalated in 2022, Ukraine has received approximately $238.5 billion in international assistance, nearly 90% of the country's budget expenditures during this period. The US has been the largest donor, contributing $95.2 billion, with two-thirds of the aid being military support.
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