IMF's Positive Decision: $900 Million Tranche and New Goals for Ukraine
Date: 2023-12-12 Author: Dima Zakharov Categories: ECONOMY
Unlocking Financial Support
The recent decision by the IMF to grant Ukraine a nearly $900 million tranche marks the third tranche within the Extended Fund Facility (EFF) program. The IMF's Board of Directors concluded the second review of the program, acknowledging Ukraine's successful achievement of key structural milestones and progress in meeting other obligations. This decision not only aids in closing the challenging financial year of 2023 but also paves the way for obtaining larger tranches in 2024, expected to be more demanding for the country's finances. It signals Ukraine's capability to fulfill commitments and reform even amidst wartime conditions.
New Challenges Ahead
However, it's crucial to embark on fulfilling new tasks necessary for a successful third review in the spring. With uncertainty surrounding international financial aid sources for the upcoming year, remaining without the Fund's support isn't an option. Approximately $4.5 billion is at stake, anticipated across three tranches. What steps are required to ensure this?
Successful Reforms Amidst War: Mission Accomplished
In Ukraine's political landscape, there was minimal doubt regarding the IMF Board of Directors' positive decision. Despite challenges and delays in meeting certain tasks, substantial progress was made, evident in legislative improvements in taxation, a flexible exchange rate strategy, asset declaration by public servants, anti-corruption measures, and institutional strengthening.
Prime Minister Denis Shmyhal, expressing gratitude for the IMF's decision, emphasized Ukraine's adherence to the program's goals amid a full-scale war. Similarly, Finance Minister Serhiy Marchenko highlighted the implementation of crucial policies to bolster Ukraine's economic competitiveness.
IMF's Acknowledgment
The IMF recognized Ukraine's significant progress despite complex circumstances, particularly emphasizing advancements in anti-corruption measures. The Fund underscored Ukraine's economic resilience while acknowledging the need for continuous reforms and financial stability amid uncertainties associated with the war.
Future Tasks: Moving Forward
IMF Managing Director Kristalina Georgieva emphasized the necessity for decisive political actions in Ukraine to ensure budgetary and debt stability. Revenue mobilization stands as a critical element to meet financial needs, support reconstruction, and social expenditures. Fiscal priorities involve implementing a National Income Strategy, averting actions undermining the tax base, and further reforming to fortify budgetary fundamentals.
