Ukraine needs to reduce the size of its shadow economy to continue receiving help from Western partners.

As FT writes, Ukrainian authorities are trying to improve the country’s financial condition by implementing several scenarios simultaneously, which can be called a mixture of debt restructuring, privatization, and tax rate increases. In this way, the government seeks to overcome the budget deficit.

However, Ukrainian investors say Kyiv should do more to eliminate the country’s shadow economy. The Ministry of Finance of Ukraine must submit the budget for 2025 for approval by mid-September. By this time, it is necessary to settle the issue of the balance of revenues and expenses of the state treasury.

Andriy Hunder, President of the American Chamber of Commerce in Ukraine, believes that the Ukrainian government should recognize the scale of the shadow economy’s spread. The next step should be taking up an immediate fight against it.

According to a specialized parliamentary committee, the shadow economy amounts to $12B. According to experts, resources for the continuation of the war must be sought within the country.

As a reminder, from January to September 2020, Ukraine’s shadow economy reached 31% of GDP.