Funding Ukraine: A Cost-Effective Strategy to Prevent Wider Conflict
Ukraine’s proven reliability as a borrower, coupled with a robust debt repayment strategy, makes current financial aid a fiscally sound investment for its partners. Preventing Ukraine’s defeat through timely funding is economically cheaper than shouldering the costs of prolonged conflict and refugee support. While Ukraine is increasing domestic revenue, substantial external financing remains crucial for both wartime needs and the extensive post-war reconstruction. The IMF advocates for increased tax revenue, including a VAT increase, to support this, alongside initiatives like the G7’s US$50 billion plan. Despite the war’s impact, Ukraine’s economy is projected to recover, with GDP growth forecast to reach 4% in 2024.
John Q. Hosedrinker