Medium-Term Budget Planning In Ukraine: Overcoming Uncertainty During War
Authors: Holynskyy Yuriy O. 
Published: December 2024

The article provides a comprehensive analysis of medium-term budget planning (MTBP) in Ukraine, which is a vital instrument for the state's financial policy, especially in the context of war. The study examines whether MTBP can effectively function under conditions of extreme uncertainty caused by ongoing conflict and economic instability. The focus is on the difficulties in applying MTBP in a wartime economy, where macroeconomic indicators are unpredictable, and the instability of revenue inflows complicates accurate forecasting. The article explores key challenges, such as the prioritization of defense expenditures over long-term investments in socio-economic development, the significant role of international financial aid, and the difficulties in aligning budget strategies with the shifting dynamics of military and humanitarian needs. A critical issue raised is the potential mismatch between the expectations of international partners, such as the International Monetary Fund (IMF) and the European Union, and the reality of Ukraine’s ability to maintain financial discipline during wartime. The study draws on examples from other countries that have implemented MTBP during crises, such as nations in Central and Eastern Europe, to propose strategies for Ukraine. These examples highlight the necessity of institutional reforms and the creation of adaptive mechanisms that can respond to the unpredictability of war. The author argues that, despite the high level of uncertainty, MTBP remains crucial for ensuring transparency and accountability in Ukraine's fiscal policy, which is a key demand from international donors. Moreover, the article underscores the importance of building institutional resilience, improving the state’s capacity for effective financial management, and maintaining flexibility in budget planning to account for unforeseen circumstances. These factors are essential to ensure that MTBP does not become a mere formality designed to satisfy the requirements of foreign creditors but rather a functional tool that can help stabilize Ukraine’s economy in the long term. In conclusion, the study suggests that while MTBP faces significant obstacles in the current wartime context, its continued implementation is vital for Ukraine’s financial stability. The article provides several key recommendations, including the need to develop clear quantitative indicators for evaluating budgetary programs, increase institutional capacity to handle financial uncertainties, and ensure the transparency of the budget process. Additionally, it emphasizes the importance of leveraging international support not only for financial aid but also for knowledge and expertise in budget planning. These measures will help Ukraine maintain a robust fiscal policy during the war and lay the groundwork for post-war economic recovery. With these insights, the article contributes to the broader discourse on how wartime conditions affect fiscal policy and offers practical recommendations for improving MTBP in Ukraine during this challenging period. The study highlights the balance between adapting to immediate needs, such as defense and humanitarian efforts, and ensuring that long-term financial strategies remain viable despite the war's unpredictability. Key recommendations include improving institutional capacity, creating flexible mechanisms for responding to economic shocks, and ensuring transparency throughout the budget process.