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IMF finds Ukraine needs $20bn more than estimated as US support dwindles
During last week’s meetings, the International Monetary Fund exposed a critical gap in Ukraine’s budget just as the country’s largest donor has scaled back support.
The shortfall emerged as Ukraine faces mounting pressure to sustain its war effort.
US contributions have dwindled since President Donald Trump’s return to the White House, making the European Union Ukraine’s largest financial provider.
The timing creates unprecedented challenges for Ukraine to maintain long-term resistance against Russia’s invasion.
IMF calculates massive funding shortfall
According to Bloomberg, the IMF estimates Ukraine’s total funding requirements will reach $47.5-57.5 billion over two years, significantly exceeding Kyiv’s projections of $37.5 billion.
IMF spokesperson Julie Kozack confirmed Thursday that the IMF is working jointly with Ukraine’s authorities to examine financing needs for the rest of 2025 and 2026.
She assured, “These discussions will include looking at the appropriate assumptions regarding the potential timeframe for the war.”
The two sides expect to settle on final figures next week, and governments and the IMF will then contact Ukraine’s allies to discuss additional financing sources.
Systemic issues
The discrepancy centers on military spending verification and Ukraine’s shadow economy, which the government estimates to be over 30% of GDP.
The IMF has flagged concerns about soldier payment verification, with many recipients potentially ineligible for maximum payouts.
Despite domestic resistance to higher taxes during wartime, Ukraine also faces pressure to reduce its massive shadow economy and increase tax burdens on war-weary citizens.
Ukrainian analyst: IMF exposes hidden problems
Ukrainian business journalist Yurii Nikolov from nashigroshi.org argues the IMF has exposed long-hidden problems in Ukraine’s wartime financing.
He wrote on Facebook that the IMF previously calculated aid “assuming the war would end in 2025. But what a surprise! It turned out Putin doesn’t want to give up.”
“The IMF has gotten into the dirtiest corners of the Ukrainian kitchen and showed Zelenskyy where to look for money for the war,” Nikolov wrote, highlighting: “Verification of payments to soldiers, since many of them are not entitled to maximum payments (yes, dead souls, rear personnel with front-line payments through connections).”
He also criticized Ukraine’s reluctance to increase taxes: “Ukraine also does not want to increase the tax burden on its war-weary population, despite IMF recommendations. The lender plans to force the government to reduce the size of the shadow economy.”
Funding crisis deepens
The funding gap comes as Ukraine faces its most challenging donor landscape since Russia’s invasion began. Since Trump returned to office in January, US contributions have dwindled significantly, with no new military aid packages announced in nearly five months.
This shift has made the EU Ukraine’s largest financial provider, but European resources alone cannot fill the growing gap.
Despite having surplus civilian aid, Ukraine already faces a $7 billion defense funding crisis, highlighting how Western funding restrictions create structural imbalances.
Pressure intensifies
The IMF’s $15.5 billion program expires in 2027, with most funding already disbursed. Prime Minister Yuliia Svyrydenko seeks approval for a new package by year-end, but the lender is demanding significant institutional changes as a condition for continued support.
Ukraine has already faced repeated IMF pressure over anti-corruption reforms.
In August, Ukraine was forced to appoint an anti-corruption investigator whom the government tried to block after $2.3 billion in aid was threatened.
The country has also tripled its military tax from 1.5% to 5% in efforts to meet international lender requirements while closing domestic funding gaps.
