IMF approves another tranche of US$1.1 billion for Ukraine

The International Monetary Fund's Executive Board has completed the sixth review of the Extended Fund Facility for Ukraine and approved a new tranche of US$1.1 billion.

Source: International Monetary Fund (IMF); Ministry of Finance of Ukraine

Quote from Serhii Marchenko, Minister of Finance of Ukraine: "As a result of the successful review, Ukraine will receive a tranche of about US$1.1 billion in the near future. This will bring the IMF's financing this year to almost US$5.4 billion, and the total disbursement under the EFF will amount to US$9.8 billion. I am grateful to the IMF team for the productive cooperation."

Details: The IMF reported that Ukraine's economy is demonstrating resilience despite the difficult conditions. All quantitative performance criteria and structural indicators scheduled for the end of September have been met.

Nevertheless, the IMF noted the need to maintain the pace of reforms, particularly in the area of domestic revenue mobilisation, for macroeconomic stability and restoration of fiscal sustainability.

Quote from Kristalina Georgieva, Managing Director of the IMF: "The economy has remained resilient, reflecting the continued adaptability of households and firms, although risks are tilted to the downside due to headwinds from attacks on energy infrastructure and a tight labour market. Preparedness and contingency planning are key to enable appropriate policy action should risks materialise."

More details: Georgieva noted that strict implementation of the adopted state budget for 2025 would be key to the continued stability of the economy and stressed the need for continued progress in mobilising domestic revenues to meet priority spending needs and restore fiscal sustainability.

The IMF welcomed the recent increase in the National Bank of Ukraine’s key policy rate and called for maintaining exchange rate flexibility to enhance economic resilience.

Georgieva said that Ukraine should pay special attention to the establishment of a new supreme administrative court and amendments to the Criminal Procedure Code.

The IMF's baseline scenario foresees GDP growth of 4% in 2024, but next year it is expected to slow to 2.5-3.5% due to tensions in the labour market, the impact of attacks on energy infrastructure and continued military uncertainty.

The Ministry of Finance of Ukraine reported that Ukraine has already fulfilled 35 structural indicators under the EFF programme, 20 of which are in the fiscal area.

Background: On 23 October, the state budget received another tranche of the US$1.1 billion IMF loan following the fifth revision of the financing programme for Ukraine. The Fund again praised the Ukrainian government for its skillful management of the macroeconomic situation despite the full-scale war.

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