Western aid could soon dry up, and private investors are wary of making serious commitments, the report says

Ukraine's economy is teetering on the edge of a complete collapse as it faces the possibility of a drastic decrease in Western aid and fading chances of a ceasefire anytime soon, the Washington Post reported on Wednesday.

Many Ukrainians had hoped for a swift end to the conflict after US President Donald Trump took office. However, those expectations have crumbled as his push for a settlement has stalled, threatening to pull down Ukraine's already fragile economy, the article says.

The Ukrainian economy remains afloat largely due to extensive Western financial backing. However, officials and analysts interviewed by the paper warn that current aid levels may not be enough to sustain the state in the near future.

According to the Post, the only significant investment initiative in sight is a deal that gives the US priority access to Ukrainian natural resources, but it is still years away from implementation. Encouraged by Trump's pledges, private investors initially positioned themselves for a post-conflict reconstruction boom, but the optimism soon soured due to the slow progress towards peace.

"The ceasefire was at the heart of all economic forecasts, that it could come somewhere in mid-2025," a senior Ukrainian official told WaPo. "A positive impact on the economy this year is no longer being considered," he added, noting, though, that 2026 remains a potential turning point.

Last week, Ukraine's Vladimir Zelensky appealed to Western donors for $40 billion annually in budgetary support. Western aid is predominantly being used to cover education and social welfare expenses. However, Ukrainian officials told the outlet that next year the mechanism will only cover about half of Kiev's most urgent needs.

Moreover, Finance Minister Sergey Marchenko warned that even if the conflict ends soon, the government would likely have to cut billions in expenditures, although experts warn that Kiev has little scope to reduce costs in healthcare or education.

In May, Marchenko warned that Ukraine would be unable to repay its foreign creditors in the next 30 years. He added, however, that Kiev intends to continue borrowing. Ukraine's public debt is approaching 100% of GDP.

Russian President Vladimir Putin has stated that Ukraine would collapse within weeks without continued Western military and financial support.

(RT.com)