KYIV, Dec 26 – The Ukrainian authorities have taken urgent measures to close the gap in financing the general government sector, which arose in the last few months of 2022 due to an increase in state budget spending by UAH 387 billion in mid-October, but the residual deficit is still estimated at UAH 67 billion (14% of GDP), according to the IMF documents to the Program Monitoring with Board Involvement (PMB).

"The residual general government financing gap is assessed at UAH 67 billion (1.4% of GDP). Unless further financing can be identified before the end of the year, this could result in the accumulation of arrears, with carryover implications for 2023 and beyond. Confirmation of the full picture of arrears is complicated by the limitations under martial law on the Ministry of Finance’s (Treasury's) authority to collect data from all spending units in general government. The authorities are committed to restore the ministry's authority to collect data, and to strengthen its ability to obtain data on arrears and monitor the financing gap – whose size is subject to considerable uncertainty. Progress on this front is essential to improve monitoring and prepare for future engagement with the fund. The authorities will re-assess in mid-December the likelihood of arrears emerging, and potential implications for subsequent years" the IMF said.