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The UN refugee agency, UNHCR, is planning to reduce its 2027 budget by 16% to $7.14 billion and lower its budgeted workforce by around 3,500 posts, according to documents reviewed by Reuters. The cuts come as the agency faces continued financial pressure from declining foreign aid contributions.

UNHCR said the scale of the planned workforce reduction does not necessarily represent actual job losses, as many positions listed in previous budgets were never filled. The agency said it would focus its limited resources on emergency refugee assistance, protection, voluntary returns and helping displaced people become more self-reliant.

The reductions come as global displacement is expected to reach a record 131.2 million people in 2027, according to UNHCR projections. Budgets are expected to fall across all regions, with the Americas facing the largest reduction. The agency’s preliminary 2027 budget is expected to be considered for approval in October.

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The International Monetary Fund (IMF) welcomed the European Union’s decision to lend €90 billion ($105 billion) to Ukraine over the next two years, calling it a key step toward closing financing gaps and restoring debt sustainability. The EU opted to borrow funds for this loan rather than use frozen Russian assets, providing crucial support to Ukraine, which has relied heavily on donor aid since Russia’s full-scale invasion in 2022 disrupted its economy.

The IMF has highlighted that additional measures are needed before approving Ukraine’s new $8.1 billion lending programme. These include implementing a program-consistent budget for 2026, broadening the tax base, promoting anti-corruption reforms, and securing financing assurances from international donors. The Fund estimates Ukraine will need around €135 billion ($158.57 billion) for 2026–2027, with the interest-free EU loan covering roughly two-thirds of these needs.

Despite the new financial support, Ukraine faces ongoing economic pressures as the war continues to drain resources. Finance Minister Sergii Marchenko emphasized the importance of implementing a Reparations Loan, while the country plans to allocate about 27% of its GDP, or 2.8 trillion hryvnias, to defence spending in 2026. The IMF reaffirmed its commitment to working with international donors to ensure sustainable financing for Ukraine.

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