FirstFT: Ukraine’s finance minister calls for ‘immediate’ support

Ukraine’s finance minister has made an appeal for immediate financial support of tens of billions of dollars to plug a gaping fiscal deficit caused by the Russian invasion.

Government spending exceeded revenues by about $2.7bn in March and Ukraine expects the gap to expand to $5bn-$7bn a month in April and May.

“We are under great stress, in the very worst [financial] condition,” Sergii Marchenko said in an interview with the Financial Times. “Now it is a question of the survival of our country. If you want us to continue fighting this war, to win this war . . . then help us.”

Marchenko painted a grim picture of the damage to Ukraine’s economy inflicted by more than seven weeks of war with its neighbour. Destruction to civilian and military infrastructure was estimated at $270bn, he said, with nearly 7,000 residential buildings damaged or destroyed.

Meanwhile, a former Russian finance minister said the country’s economy would shrink by more than a tenth this year, citing internal forecasts that have not been made public. Alexei Kudrin, who served as finance minister from 2000 to 2011 and now runs a budget watchdog, said the economy was struggling after sanctions were imposed on Russia, according to state news agency Interfax.

More from Ukraine:

• Diplomacy: Austrian chancellor Karl Nehammer said he had “no positive impression” of his talks with Russian president Vladimir Putin, after a trip to Moscow yesterday to try to broker an end to the country’s invasion of Ukraine.

• Military update: Signs Russia was nearing a significant new offensive in eastern Ukraine mounted yesterday as US defence officials reported that troops withdrawn from Kyiv and the surrounding areas were being resupplied and reinforced by the Kremlin for redeployment in the Donbas region in the east of Ukraine.

• War crimes investigation: The Netherlands has called on governments to increase their financial and political support for the International Criminal Court as it investigates alleged war crimes committed by Russia in Ukraine.

• Russian default: Moscow has vowed to sue if sanctions force it to default on its bonds but academics and lawyers have dismissed the threat as “payment theatre” designed to project the state’s financial strength.

Track Russia’s invasion of Ukraine in maps and for the latest news go to our live blog.

Here’s the rest of the day’s news — Gordon.

Five more stories in the news

1. US orders non-essential consulate staff to leave Shanghai The US state department has ordered non-essential workers to leave its consulate in Shanghai. Authorities in China’s largest city yesterday unveiled a blueprint for easing some of the restrictions on its 26mn residents who have been the subject of a citywide lockdown for more than a week.

2. Honda bets on hybrid cars The Japanese carmaker said it would pour $40bn into electric vehicles over the next decade, but stopped short of throwing its full weight behind battery-powered vehicles as it bet that hybrid cars would dominate in the near future.

3. US airlines and passengers at odds over masks Airline executives and politicians are piling on pressure for the US to let Covid-19 mask rules expire on schedule next week, even as most of the public wants to keep them. Forced mask-wearing was related to 72 per cent of a record 5,981 reports of unruly passenger behaviour in 2021.

4. Epic Games secures $2bn from Sony and Lego The maker of Fortnite has secured $2bn in new funding from Sony and the group behind the Lego franchise. The investment, which values Epic at $31.5bn, follows last week’s announcement from Kirkbi and Sony that they were forming a longtime partnership to create a so-called metaverse for children.

5. Macron and Le Pen begin final sprint in French election run-off President Emmanuel Macron yesterday started a frantic hunt for working-class votes across France in an attempt to ensure victory over his resurgent far-right rival Marine Le Pen in the second and final round of the country’s presidential election on April 24.

• Go deeper: The veteran leftist Jean-Luc Mélenchon had a message for his supporters hours after failing to make it to the final round of France’s presidential election: do not give “a single vote” to far-right candidate Marine Le Pen in the run-off vote.

• Opinion: We need to think about a Le Pen presidency, writes Gideon Rachman. The far-right candidate could win, plunging Nato and the EU into turmoil.

The day ahead

Economic data US inflation is forecast to have topped 8 per cent in March, bolstering expectations the Federal Reserve will take more aggressive action to curb the highest inflation in 40 years. The consumer price index is expected to have risen to 8.4 per cent last month compared with March 2021, a pace last seen in January 1982, according to consensus forecasts compiled by Bloomberg.

Monetary policy Fed governor Lael Brainard will discuss how inflation impacts the US economy during a speech at the WSJ Jobs Summit. Richmond Fed president Thomas Barkin will deliver a speech titled “Beyond today’s inflation storm” to Money Marketeers of New York University.

Company earnings The grocery store chain Albertsons is expected to report revenues of $16.7bn in the fourth quarter of 2021 and revenues of $71.1bn in the fiscal year of 2021, according to analysts polled by Refinitiv. Grocery stores performed well during the pandemic and have managed to keep that upbeat performance going even as inflation raises food prices and threatens margins.

What else we’re reading and listening to

No dethroning the dollar Sanctions against Russia are built around denying Moscow access to foreign currencies, particularly the dollar. It should follow that countries wanting to avoid a similar fate would seek to diversify away from the US currency. There is a certain logic to that but the reality is the greenback cannot be avoided, writes Megan Greene.

JPMorgan after Jamie Dimon Chief among all the succession questions on Wall Street is what will happen when Jamie Dimon relinquishes the top job at JPMorgan. Last week the bank offered a rare glimpse of its preparations.

FT interview with Seoul’s mayor Oh Se-hoon, the mayor of Seoul, has admitted that South Korea’s reputation for opaque and heavy-handed regulation has hampered the city’s ability to lure business and investors quitting Hong Kong. Read the full interview here.

Energy demand endangers species As one of the world’s most famous game reserves, Murchison Falls National Park is home to some of the largest populations of elephants, giraffes, lions and leopards. But life is about to encounter a new threat, as the $10bn Lake Albert oil project run by TotalEnergies of France and China’s Cnooc roars into life.

Tech Tonic: Chips with everything In this week’s episode of the FT podcast, we take a detailed look into the semiconductor industry and Taiwan’s unique position as a bastion of computer-chip talent. James Kynge, global China editor, looks at the unintended consequences of the race for semiconductor dominance.

Beauty

New York-born and raised Diarrha N’Diaye-Mbaye last year launched make-up line Ami Colé, a “no-make-up make-up look” for black women named after her mother. She talks to the FT about her break in the beauty business.