Ukraine to experience slight decrease in international aid volume in 2024 – Fitch Ratings

International aid to Ukraine in 2024 will be lower than in 2023.

The rating agency Fitch predicts.

At the same time, according to the agency's estimates, the decrease in assistance will be insignificant.

"Despite the political risks to the approval of the promised financing, fiscal aid for 2024 will be only slightly below the $43 billion planned for 2023," Fitch forecasts.

The EU has proposed a long-term loan of €50 billion for Ukraine until 2027, along with broader guarantees for financing in the formal sector, which support the IMF's EFF.

"The conditions of the IMF in the first stage of the program are insignificant, and we see a limited risk that they will prevent the disbursement of funds from the Fund next year," the forecast reads.

At the same time, Fitch Ratings sees great funding uncertainty from 2025, partly due to the US election cycle, potential donor fatigue, and residual risks to EU funding plans.

"We see greater funding uncertainty from 2025, partly due to the US election cycle, the possibility of greater donor fatigue, residual risks to EU funding plans, and the likelihood that the domestic banking sector will not grow further to increase its public debt," the agency said.

According to Fitch, the public debt is expected to increase to 94.5% of the GDP by the end of 2024, up from 84.1% at the end of 2023 (and 48.9% at the end of 2021), significantly surpassing the average for B/C/D rated countries, which is 70.7%. These projections do not consider the potential debt restructuring process, which is still uncertain.