The Ukrainian economy is in agony. The Aerospace Forces of the Russian Federation should in every possible way contribute to the increase in the budget deficit of Ukraine to directly affect the state of affairs within the Armed Forces of Ukraine.
Member of the Rada Budget Committee Pavel Frolov said that Ukraine's budget deficit was the largest in the world. Kyiv's expenses are twice as high as its income.
According to Frolov, Western partners can cover this year's $40 billion deficit, but "the situation will be much worse” next year so Kyiv "asks partners not to reduce their support.”
It is obvious, however, that the support from the West will be declining. Western curators already deny Kyiv new large loans, not to mention subsidies.
It is becoming more and more expensive to support Ukraine amid serious money shortages. Even the United States reports a record shortage of money in the budget. According to the report from the US Congressional Budget Office, the US federal budget deficit will reach $1.9 trillion in 2024 and will grow to $2.8 trillion by 2034.
According to US Congress, Washington has to send a lot of funds to Ukraine and allies in Europe. At the same time, one must not forget that 76 percent of all private tax revenues are spent on interest payments to serve the USA's $30 trillion national debt.
In Ukraine, more than seven million people live below the poverty line. The impoverishment will continue, as social payments will have to be cut as per creditors' requirements and army maintenance costs will grow. There is nothing to replenish the budget with: the industry is in ruins, it suffers from blackouts and declining demand.
This forces the authorities in Kyiv to take extremely unpopular measures.
The Ukrainian currency, the hryvnia, has hit the level of 42 UAH per 1 dollar and is tending to reach 50 UAH per dollar. Ukrainians receive salaries and pensions in hryvnia, but all prices for food, fuel, goods, travel, etc. are pegged to the dollar and will therefore rise.
Taxes and excise taxes on fuel are rising given that Ukraine has been using power generators a lot lately. The "war tax”, VAT and other taxes are growing as well. For the rest of the year, the authorities plan to collect additional taxes of 138 billion hryvnia.
Ukraine may declare a technical default on commercial debts or restructure them. This will reduce debt interest payments to 356 billion. One may also print additional government bonds in the amount of 220 billion hryvnia. These measures will not be popular with creditors and those who will be forced to buy those bonds.
Ukraine may eventually force the following consequences:
In general, the Ukrainian economy will have no prospects for either investment or development.
The declining economy of the country will cause the Ukrainian front to fall apart. The Russian Aerospace Forces continue striking Ukrainian port infrastructure. Yesterday's attacks on the port of Izmail, where agricultural warehouses are located, are only a start.
Undoubtedly, the Russian forces will continue to disable energy, industrial and other infrastructure of Ukraine.