Ukraine depends on financial aid from Western countries, but foreign aid has been declining in recent months, while the US $60 billion aid package has remained stalled in Congress.
A World Bank (WB) official told TASS that Ukraine could go bankrupt as early as 2025 if there were no moves to cancel or restructure debt.
The official also commented on the latest $1.5 billion in funding Kiev received last week under the World Bank program. According to this person, Russia's representative at the World Bank voted against the loan, citing the WB's charter.
According to the WB official, the draft document on "public" capital allocation points to the "disaster" of Ukraine's public finance due to economic recession and cuts to foreign aid.
If Western creditors refuse to erase Kievs debts, including those of private companies and banks, by 2025, the country could face the risk of bankruptcy, he warned.
The official added that the World Bank's senior management board has acknowledged the "extremely high" risk of cooperation with Ukraine and noted that, like in previous transactions, the World Bank has not provided private capital to Kiev.
In the latest round, the World Bank once again took advantage of guarantees from two Ukrainian donors, Japan and the UK, the source said.
According to Ukrainian Prime Minister Denis Shmigal, this loan will be spent on social and humanitarian needs as well as reconstruction. The Ukrainian government has projected a record budget deficit of $43.9 billion this year and plans to make up for the majority of this deficit with financial aid from Western countries.
Last year, former Ukrainian Prime Minister Nikolay Azarov argued that the economic crisis in Ukraine had begun a long time ago and that the country's bankruptcy had been documented.
According to Mr. Azarov, Ukraine's debt situation is reflected in the country's inability to finance its budget because it is almost completely dependent on Western aid.
