Ukraine, without foreign aid, may postpone pension indexation – minister

(Reuters) – Ukraine’s minister for social policy believes the country will be able to pay pensions even if crucial Western financial aid is not approved soon, but the planned indexation of pensions, to keep them in line with rising prices, may be postponed.

Kyiv has poured all its revenue into defence since Russia’s February 2022 invasion, relying on foreign support to cover everything from pensions to social payments.

But key funding packages, including 50 billion euros ($55.54 billion) from the European Union, have been blocked in Brussels and Washington.

Minister Oksana Zholnovych stressed that pensions, in contrast to other social payments, were covered by internal financial means.

“It may be not possible if in fact there are such risks (of lacking international assistance) to talk about indexation, but the basic pensions will be paid, and we will find funds for this from domestic Ukrainian resources,” she said in televised comments.

Ukraine’s economy minister told the Financial Times on Wednesday that 500,000 civil servants, 1.4 million teachers and 10 million pensioners could experience payment delays if Western financial aid is not approved soon.

(Reporting by Yuliia Dysa; Editing by Nick Macfie)