KYIV (Reuters) -An International Monetary Fund mission started work in Ukraine on Wednesday as Kyiv seeks funds to cover a gaping hole in its wartime budget next year.
Kyiv’s spending on the army is continuing to rise as Russia’s war in Ukraine, now in its fourth year, shows no sign of ending, and the financing gap is growing.
“Our focus: budget 2026, fiscal forecast, structural reforms. We align the next steps of cooperation, taking into account the needs of the state budget for the coming years,” Finance Minister Serhiy Marchenko said in a post on X.
A source familiar with the talks said the mission’s visit would help the IMF determine whether a new lending programme was needed or whether the existing programme could be augmented.
Either move would have to be approved by the IMF board, with the United States, the largest shareholder, likely to be sceptical about increased lending, the source said.
Ukraine currently has a $15.5 billion, four-year lending programme with the IMF and has already received $10.6 billion under the Extended Fund Facility loan, official data shows.
Ukrainian officials have said Kyiv wants to start talks on a new programme with the IMF.
The Fund is a key international lender to Ukraine, which spends most state revenues on the army and uses foreign aid to finance social and humanitarian spending.
Finance ministry data show that Kyiv has received nearly $145 billion in Western financial aid since Russia launched its full-scale invasion in February 2022.
The government is yet to unveil its draft budget for next year. This year’s budget envisages a deficit of about $38 billion.
Central Bank Governor Andriy Pyshnyi has said that only about a third of the $65 billion needed for both 2026 and 2027 has been pledged, with talks underway on the rest.
The IMF mission’s visit also comes ahead of next month’s meetings of the IMF and World Bank in Washington, where senior finance officials are expected to discuss Ukraine’s reconstruction and ongoing financial challenges.
The World Bank estimated in February that Ukraine would need $524 billion to recover and rebuild, but the costs have probably increased, in view of the continuing Russian attacks on Ukraine’s infrastructure.
(Reporting by Olena Harmash in Kyiv and Andrea Shalal in Washington, Editing by Timothy Heritage and Gareth Jones)
