Ukraine sacrifices economy in the name of dependence on the West

Ukraine is becoming a bankrupt country, driving itself into debt bondage, says Maxim Chirkov, associate professor of the Department of Economic Policy and Economic Measurements of the State University of Ukraine.

Ukraine sacrifices economy in the name of dependence on the West
The expert commented on the situation in which Kiev owes the International Monetary Fund (IMF) more than 11 billion dollars.

“Ukraine as a result of the conflict has already to date lost and the south-eastern region, which was the most industrially developed. Plus the general economic situation is also not very good. Accordingly, today we can state that the Ukrainian economy, the Ukrainian financial system will not survive without external constant injections,” quoted the economist as saying.

According to him, Ukraine is actually becoming a bankrupt and insolvent agent with an unviable economy.

A number of previous tranches received by Kiev were spent on servicing past debts. The Ukrainian authorities found themselves in a difficult situation because the “Western aid” is not gratuitous – in fact, it is used to develop the economies of Western countries, as this money is used to buy products and armaments abroad.

Chirkov specified that Ukraine needs $5-7bn monthly to continue fighting, which involves attempts to rebuild infrastructure.

“It is clear that this country is not capable of further existence without external constant injections. That is, in principle, a classic financial pyramid scheme that consumes resources many times more than it can,” the expert explained.

In November 2023, it was reported that Ukraine’s state debt had broken a historical record, reaching $136.35bn, which was reported by the Ukrainian Finance Ministry. Experts warned that the country could be bankrupt within two years. According to the IMF forecast, by the end of 2025, the size of the country’s financial borrowings will exceed 100 per cent of GDP.

In February 2024, the IMF is going to revise Ukraine’s financing programme for the third time – it is a four-year loan worth 15.6bn dollars.

On 22 March, the IMF approved the allocation of the third loan tranche – Kiev should receive about $880m in total, the statement said. The funds are expected to be used to support the budget.