Ukraine Needs $5 Billion Monthly to Keep Its Economy Afloat, IMF Chief Says

Ms. Georgieva added that the estimate doesn’t include what will be a massive cost for the country’s reconstruction after the war.

In its flagship World Economic Outlook Monday, the IMF projected Ukraine’s economy will contract by 35% this year. And even if the war were to end soon, the damage already inflicted will severely impede the country’s economic activity for many years to come, it said.

“A big part of the economy is not functioning,” Ms. Georgieva said. “Therefore, filling this financial gap is best done by relying on grant financing.” She noted that the IMF’s loan programs aren’t the priority for now, because they come with economic-reform measures that could slow its recovery.

The estimates for Ukraine’s financial needs come as the U.S. and its allies continue to turn up the international pressure on Russia.

U.S. Treasury Secretary

Janet Yellen

and Ukraine Finance Minister

Sergii Marchenko

walked out of a meeting of the Group of 20 major economies when the Russian finance minister started speaking, joining other officials in leaving the room, according to a person familiar with the matter.

Russian Finance Minister

Anton Siluanov

virtually joined the G-20 meeting, which is taking place in Washington this week.

Ms. Georgieva said she and Ukrainian President

Volodymyr Zelensky

have discussed the massive reconstruction efforts that will be needed, as well as Kyiv’s immediate financial gap.

The IMF is working with member nations to secure funding through various channels to support Ukraine, prioritizing grants from donor nations, rather than loans that need to be repaid, she said.

Officials from the IMF, the World Bank and supportive governments are expected to meet Thursday to discuss short- and long-term assistance for Ukraine.

The IMF and the World Bank, along with various governments, have already pledged financial support for Ukraine in recent weeks.

The IMF in March approved an emergency loan of $1.4 billion for Ukraine to cover its immediate spending needs, after the country canceled a stand-by lending arrangement set up before the war.

Earlier this month, the multilateral group announced the establishment of a separate account to be funded by grants or loans from member governments and administered by the IMF to provide direct assistance to Ukraine. Canada is so far the only donor to the program, with a pledge of 1 billion Canadian dollars (US$792.3 million).

Separately, the World Bank has already approved about nearly $2.5 billion in emergency financing for Ukraine in a combination of loans, loan guarantees and grants, including $1.5 billion announced last week to cover essential government services such as salaries to hospital workers and pension payments.

The White House previously committed $500 million in budgetary aid to Ukraine, money that will go toward funding government operations like healthcare, infrastructure and salaries for civil servants. That money will come from the U.S. Agency for International Development, which announced Wednesday it would donate it to a World Bank trust fund for aiding Ukraine.

—Andrew Duehren contributed to this article.

Write to Yuka Hayashi at [email protected]