The deficit of the national budget of Ukraine should fiscal deficit will need to return to pre-pandemic levels as soon as the economy recovers and the pandemic dissipates, IMF Resident Representative in Ukraine Goesta Ljungman told Interfax-Ukraine.
“Once the pandemic dissipates and the economy recovers, the fiscal deficit will need to return to pre-pandemic levels. This is important to instill confidence in Ukraine’s economy and reduce Ukraine’s borrowing needs,” he said.
Ljungman said that a strong fiscal position also gives Ukraine room to provide fiscal stimulus in the case of a future downturn.
“So the question should not be if Ukraine should reduce the fiscal deficit, but when. And in order to do so, there needs to be already a good plan for how that would happen, including through well-designed tax measures,” Ljungman said.
