Latvia reports over 1% of GDP in donations to Ukraine

Since Russia's invasion of Ukraine, Latvia has provided significant support to the Ukrainian government and residents in the amount of EUR 32 million. The amount of aid exceeds 1% of Latvia's gross domestic product (GDP), the Finance Ministry reported on December 22.

The Ukrainian government continues to face significant challenges in policy-making and implementation of structural reforms, given the institutional and human resources capacity constraints of the public sector due to human dislocation and direct losses. To help strengthen the capacity of the Ukrainian government, the Latvian government will provide funding of four million euros through the International Monetary Fund (IMF) and the European Bank for Reconstruction and Development (EBRD), the ministry said.

In March this year, the IMF approved a four-year loan program for Ukraine of USD 15.6 billion to build the capacity of the Ukrainian government in policies such as macro-fiscal and fiscal structural policies, monetary, exchange rate, and financial sector policies, as well as legal framework, governance and anti-corruption reforms.

Meanwhile, EBRD support for Ukraine's economy has totaled three billion euros since the Russian invasion, primarily investing in energy security, critical infrastructure, food security, and trade finance. 

In implementing these measures, the EBRD uses the EBRD Ukraine Stabilisation and Sustainable Growth Multi-Donor Account. Latvia will join this multilateral donor-co-financed technical support mechanism with a contribution of two million euros.

These IMF and EBRD capacity development support activities will be implemented in close cooperation with other international partners supporting Ukraine.

Latvia's contribution to the capacity development mechanisms of the EBRD and IMF will be classified as Official Development Assistance (ODA), thus increasing the total amount of Latvian ODA for 2023 to achieve the government target of 0.15% of gross national income.

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