NBU head views intl financial support for Ukraine as payment for export of security services
– International financial support has become a fundamental factor in the balance of payments, as it essentially represents payment by partners for security services, according to Andriy Pyshny, head of the National Bank of Ukraine.
"Today, Ukraine is actually the only provider of such services. Consequently, the stability of these revenues can be considered sufficient and guaranteed for the coming years," he wrote in a message to NBU employees on the third anniversary of his appointment as head of the central bank.
Pyshnyy recalled that eight successful revisions of the Extended Fund Facility (EFF) program with the International Monetary Fund (IMF) have already taken place, and negotiations are currently underway on a potential new program to maintain a solid foundation for the consolidation of international assistance for Ukraine in the future.
"Every time, we prove how effective we are in fulfilling our obligations. And this is a strong argument, given how important stable external financing for our country is," he emphasized.
According to the balance of payments published by the NBU, Ukraine's foreign trade deficit increased from the pre-war $2.7 billion to $25.7 billion in 2022, $37.9 billion in 2023, $38.6 billion in 2024, and $34.3 billion over the first eight months of this year.
In particular, the positive balance of trade in services of $4.0 billion in 2021 was replaced by a negative balance of $11.1 billion in 2022 (which accounted for the largest outflow of migrants from Ukraine), which decreased to $8.7 billion in 2023, to $5.6 billion in 2024, and amounted to $3.9 billion for the first 8 months of this year.
At the same time, a large-scale influx of international credit and grant financial aid offset this increase in the foreign trade deficit. As a result, while in 2022—the first year of the full-scale Russian invasion—the pre-war 2021 balance of payments surplus of $0.5 billion turned into a deficit of $2.9 billion, by 2023 a surplus of $9.45 billion was recorded, 2024 was balanced, and for the first eight months of this year, a surplus of $1.9 billion was recorded.
The current four-year Extended Fund Facility (EFF) with the IMF, worth $15.6 billion and approved in March 2023, initially envisaged total external financing for Ukraine with the participation of international partners at $115 billion in the baseline scenario and $140 billion in the negative scenario. However, as the war dragged on, these figures were increased to $153 billion and $165 billion, respectively.
Ukrainian Finance Minister Serhiy Marchenko preliminarily estimates the need for external financing during the new four-year IMF program at $150 billion to $170 billion.