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Thursday, May 19, 2022

Ukraine War: Country needs $7bn a month in aid, Zelensky says

Ukraine War: Country needs $7bn a month in aid, Zelensky says

Ukraine's president has told the world's finance ministers his country needs $7bn (£5.4bn) every month until the summer to keep functioning.
Volodymyr Zelensky also said "we will need hundreds of billions of dollars to rebuild all this later".

He was addressing an International Monetary Fund (IMF) and World Bank conference via video link from Kyiv.

The World Bank has estimated that about $60bn of physical damage has so far been inflicted on Ukraine.

Mr Zelensky also said the global community needed to exclude Russia immediately from international financial institutions, including the World Bank, IMF and others.

All countries "must immediately be prepared to break up all relations with Russia," he added.

Asked whether the IMF would be able to secure the immediate funding that Ukraine needs, the organisation's managing director Kristalina Georgieva told BBC economics editor Faisal Islam: "We found it for the first and second month.

"We believe that over time this amount is going to go down as the Ukrainian economy in the parts of the country that are not under occupation picks up, and as remittances from those who now work somewhere else start flowing."

Meanwhile, US Treasury Secretary Janet Yellen said Russia should be made to pay some of the cost of rebuilding Ukraine after the war.

It came as some nations have called for seized Russian assets to be used to fund the country's reconstruction.

However, Ms Yellen cautioned that using seized Russian central bank reserves in the US to rebuild Ukraine would be a "significant step" that would need discussions and agreement with international partners.

Ukrainian Prime Minister Denys Shmyhal, who attended the conference in person, said the country's economic output could decline by as much as 50%, with direct and indirect losses so far totalling $560bn.

That figure is more than three times the size of Ukraine's gross domestic product (GDP), which stood at $155.5bn in 2020, according to the World Bank.

"If we do not stop this war together, the losses will increase dramatically," Mr Shmyhal said, adding that Ukraine would need a reconstruction programme similar to the post-World War Two Marshall Plan that helped to rebuild Europe.

World Bank President David Malpass, meanwhile, said the damage to Ukraine's buildings and infrastructure from Russia's invasion had reached around $60bn and warned that the figure will rise further as the war continues.

Mr Malpass said the early estimate of "narrow" damage costs does not include the growing economic impact on Ukraine.

Also on Thursday, the US imposed further sanctions on Russian ships, while the UK targeted luxury goods including caviar, silver and diamonds with import bans and higher tariffs.

But the Biden administration backed Germany's caution on the European Union proceeding too fast with further sanctions on Russian energy, saying it could cost Europe more than Russia.
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