The Executive Board of the International Monetary Fund has approved the first review of the four-year Extended Fund Facility (EFF) program for Ukraine. As a result, the country will receive approximately $690 million to support the state budget, bringing total funding under the program to $2.2 billion. This was reported by Dengi.ua, citing RBC-Ukraine.
Ukraine to Receive a New Tranche
The IMF’s decision grants Ukraine access to financing in the amount of 503 million Special Drawing Rights (SDR), equivalent to approximately $690 million.
The funds will be used to finance the state budget. Once this tranche is received, the total amount of funds allocated under the EFF program will increase to $2.2 billion.
How the IMF Assesses the Ukrainian Economy
The Fund noted that, despite the ongoing war, a challenging external environment, and high risks, Ukraine has managed to maintain macroeconomic and financial stability.
According to the IMF, this was facilitated by the authorities’ prudent economic policies, cooperation with international partners, and large-scale financial assistance from donors.
At the same time, experts warned that the economic outlook has deteriorated due to intensified Russian attacks on critical infrastructure, as well as the consequences of the conflict in the Middle East.
What the IMF Said About Program Implementation
Overall, program implementation was deemed satisfactory.
Ukraine met all quantitative performance criteria and targets set for the end of March. However, by the end of June, the target level of net international reserves had not been reached, which the IMF attributes in part to the fallout from the situation in the Middle East.
In addition, the Fund noted a slowdown in the implementation of certain reforms. Some structural milestones were completed late or postponed.
The Ukrainian authorities confirmed their readiness to take corrective measures and continue reforms in the fiscal, financial, energy, and anti-corruption sectors.
International Support Remains in Place
The IMF emphasized that the program is fully funded under both the baseline and stress scenarios thanks to the support of international partners.
Specifically, this includes:
- a €90 billion loan from the European Commission;
- funding under the G7 ERA initiative;
- bilateral assistance from partners;
- an extension of the moratorium on servicing part of the public debt by official creditors.
The Fund noted that stable and predictable external financing remains one of the key factors in maintaining Ukraine’s economic stability.
Which Reforms Remain a Priority
Following the Article IV consultations, the IMF identified the main areas for further reforms.
Key priorities include reducing the shadow economy, strengthening the fight against tax evasion, preserving the independence of the National Bank of Ukraine, improving the investment climate, strengthening anti-corruption institutions, reforming state-owned enterprises, and further developing the country’s financial system.
