IMF approves US$2.2 billion tranche for Ukraine
The IMF Board of Directors has completed the fourth review of the Extended Fund Facility (EFF) for Ukraine, approving a decision to disburse about US$2.2 billion to Ukraine to be used for budget support.
Source: IMF’s statement
Quote: "Ukraine’s performance remains strong under the EFF despite challenging conditions. All quantitative performance criteria for end-March were met, and all structural benchmarks through end-June were implemented on time or with a short delay.
The Ukrainian economy continues to be resilient although the outlook remains subject to exceptionally high uncertainty. Sustained reform momentum and timely disbursement of external support are necessary to safeguard macroeconomic stability, restore fiscal and debt sustainability, and enhance institutional reforms to lay the path to European Union accession."
Details: With the US$2.2 billion tranche, the total disbursement under the programme will reach about US$7.6 billion.
The EFF programme for Ukraine for a period of 48 months with the right to access SDR 11.6 billion (equivalent to US$15.6 billion) was approved on 31 March 2023, the IMF recalled.
"Russia’s invasion of Ukraine continues to have a devastating social and economic impact on Ukraine. Despite the war, macroeconomic and financial stability has been preserved through skillful policymaking by the Ukrainian authorities as well as substantial external support. The economy remains resilient, reflecting the continued adaptability of households and firms.
Looking ahead, the recovery is expected to slow particularly given the attacks on Ukraine’s energy infrastructure, and the outlook is subject to high risks from the exceptionally high war-related uncertainty. Vigilance against these risks is necessary to enable timely responses if shocks materialise," the statement said.
"Fiscal policies for the remainder of 2024, together with preparation for the 2025 budget, should be underpinned by steadfast revenue mobilisation efforts aligned with the National Revenue Strategy. In this regard, measures that erode the tax base should be avoided and tax and customs administration together with the Economic Security Bureau of Ukraine (ESBU) strengthened. Further strengthening medium-term budgeting, fiscal risks and transparency, and public investment management should advance in support of these goals.
Steadfast reforms to enhance anti-corruption and governance frameworks, including ensuring the effectiveness of anti corruption institutions, remain essential to contain fiscal risks, secure donor confidence, enhance growth, and support the path to EU accession," the IMF added.
Background:
The IMF mission and Ukraine's representatives began negotiations on the fourth review of the Extended Fund Facility (EFF) programme, which will help raise about US$2.2 billion in June.
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