Analysis of the current state of financing the needs of the economy of Ukraine in war conditions

Анотація

This paper analyzes the current state of financial support for Ukraine’s economy under the conditions of prolonged war, focusing on the diversified structure of funding sources. The study emphasizes the pivotal role of international aid—financial, military, and humanitarian – as a cornerstone of national budget stability, especially for sustaining essential social and humanitarian expenditures. Despite substantial commitments from allied countries, the research reveals a significant discrepancy between pledged and disbursed support, underscoring concerns over timely and sufficient external funding. Particular attention is paid to the structure of EU aid and its distribution, while highlighting the critical shortage of long-term financing for post-war recovery. The analysis justifies the strategic importance of concessional lending to the defense-industrial complex as a key element in strengthening national security and wartime resilience. The paper reviews the core principles set out in Ukraine’s Credit Development Strategy and explores the institutional framework required for its implementation. It identifies a range of controversial issues within the Strategy, such as the prioritization of credit allocation and the use of the National Bank of Ukraine’s key policy rate as a monetary instrument. State-owned banks should primarily ensure lending to defense-industrial enterprises, with secondary priority given to financing social housing projects for internally displaced persons (IDPs), as a foundation for rebuilding the destroyed economy in the future. Meanwhile, all other lending areas should be handled by commercial banks. Given effective coordination between international financial support, domestic credit resources, and sound fiscal planning, Ukraine is capable of maintaining an adequate level of economic and defense financing under martial law. This, in turn, will contribute to strengthening economic resilience and accelerating post-war recovery. It has been substantiated that, in order to improve the situation, it is important to intensify diplomatic efforts to increase the fulfillment rate of commitments made by international donors, particularly in financing long-term defense-related projects. Additionally, it is crucial to optimize the structure of budget expenditures by ensuring a balance between short-term defense and social protection needs and long-term investments in development.

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