Ukraine’s Finance Minister calls on partners to develop plan to balance budget in 2026
At the seventh meeting of the Ministerial Roundtable Discussion for Support to Ukraine of the World Bank Group and the International Monetary Fund on Friday, Minister of Finance of Ukraine Serhiy Marchenko emphasized the importance of developing a joint plan with partners to balance the budget in 2026 under different scenarios.
"One of the practical steps should be the use of frozen Russian assets. Since Russia is responsible for the large-scale destruction and damage inflicted on Ukraine, using these funds is a morally justified course of action," the Ministry of Finance reported in a press release.
The meeting was opened by Prime Minister of Ukraine Denys Shmyhal, President of the World Bank Group Ajay Banga, IMF Managing Director Kristalina Georgieva, and Minister of Finance of Ukraine Sergii Marchenko.
Participants discussed Ukraine’s State Budget financing needs for 2025–2026.
In his remarks, Marchenko expressed gratitude to partners for their budget support, which has amounted to over $132 billion since February 2022. In 2025 alone, Ukraine has already received $16.8 billion in international financial assistance.
At the same time, the Minister emphasized that financial challenges persist and must be addressed proactively – regardless of whether active hostilities end or continue: "As long as the full-scale war continues, international cooperation and coordination remain critically important. Ukraine needs financial support to ensure budget liquidity. However, even after the potential end of active hostilities, cooperation with partners will be key to economic recovery, reconstruction, and financial stability. Budget expenditures will remain high even after the war ends."
According to Marchenko, the security and defense sector will remain a top priority for budget spending under any scenario, as Ukraine must continue to strengthen its military capabilities. Significant resources will also be allocated for social support, including assistance to veterans and internally displaced persons.
According to the photos, the roundtable discussion was also attended by US Treasury Secretary Scott Bessent, European Commissioner for Economic Affairs Valdis Dombrovskis, heads of the EBRD, and IFC.
According to the NBU Inflation Report published on Friday, the central bank expects external international financial assistance to Ukraine to increase to $55.1 billion in 2025 from $41.9 billion in 2024 and $42.9 billion in 2023, after which it will decrease to $17.3 billion in 2026 and $15 billion in 2027.
The updated EFF Extended Fund Facility (EFF) program with the IMF, based on the results of the seventh review, provides that Ukraine will divide external financing from the G7 countries under the ERA mechanism, which is allocated at the expense of frozen Russian assets, into three parts, including the creation of a financial buffer of $10.1 billion in the event of a negative scenario.
The program currently envisages receiving $44.1 billion through the ERA mechanism in the period up to the first quarter of 2027 (inclusive, this is the last quarter of the EFF program) for a total announced amount of $50 billion. Of this amount, $1 billion was received last year, $39.4 billion will be received this year, $2.4 billion next year, and $1.3 billion in 2027.
The baseline scenario assumes that $8.4 billion of the funds received this year will be considered as advance financing for the budget deficit in subsequent years: $8.1 billion will be used in 2026 and another $0.3 billion in the first quarter of 2027.
As for the financial buffer in case of a negative scenario, $9.1 billion from ERA revenues this year and $1 billion from revenues next year will be used to form it.
The updated program assumes that under the baseline scenario, in which the war ends at the end of this year, external financing to cover the deficit is needed this year in the amount of $39.8 billion, next year - $20 billion, and in the first quarter of 2027 - $3.1 billion.
Under the negative scenario, in which the war continues until mid-2026, and shocks are expected as early as the second quarter of this year, external financing to cover the deficit is needed this year in the amount of $48.8 billion, next year - $21 billion, and in the first quarter of 2027 - $7.1 billion.