The International Monetary Fund Managing Director, Kristalina Georgieva, speaks at a conference in Riyadh
The International Monetary Fund Managing Director, Kristalina Georgieva, speaks at a conference in Riyadh, Saudi Arabia, October 3, 2022. Reuters

Ukraine will need an estimated $3 billion to $4 billion in external financing help per month next year to keep its economy running as Russia's war drags on, International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday.

Georgieva said Ukraine's international partners have committed $35 billion in grant and loan financing for Ukraine in 2022, enough to close its financing gap for this year, but its financing needs would remain "very large" in 2023.

Speaking at a high-level meeting held on the sidelines of the annual IMF and World Bank meetings, Georgieva said Ukraine had made progress in normalizing economic policies and stabilizing its economy despite "extremely difficult circumstance" since the start of the war.

But risks remained "exceedingly high", as demonstrated by Russian missile attacks on Ukraine this week, and high levels of external help would remain necessary to cover ongoing budget costs and initial infrastructure repairs, Georgieva said.

"Our current thinking is that the financing requirements will be around $3-$4 billion per month in 2023," she said. "We all have to be alive to the possibility that social and infrastructure requirements could push financing needs beyond this range, depending on the evolution of the war."

U.S. Treasury Secretary Janet Yellen told the same event that donors to Ukraine needed to continue their efforts. She said the United States would begin to disburse another $4.5 billion in grant assistance to Ukraine in coming weeks, bringing its budget assistance to $13 billion since the start of the war.

"We welcome the efforts of all donors to meet Ukraine's needs. However, the scale, predictability, and grant component of disbursements must improve," she said.

Georgieva said the IMF planned to work with the Ukrainian authorities to set up a new "Ukraine Economic Forum" at the request of Ukrainian President Volodymyr Zelenskiy to facilitate the sharing of information and clarify financing needs.

This would enable coordination on macroeconomic developments, policies, and projections, based initially on a new IMF monitoring instrument known as Program Monitoring with Board Involvement (PMB) that Ukraine requested last week.

She said the IMF would start talks with Ukraine soon about the PMB and an agreed comprehensive macroeconomic framework that would clarify external financing needs, which "should pave the way for a full-fledged IMF program once conditions allow."

The IMF last week approved $1.3 billion in fresh emergency financing for Ukraine through a new food shock window, on top of $1.4 billion in emergency funding approved in March.

The fund has also mobilized $2.2 billion for Ukraine through an administrative account, she said.