IMF, Ukraine reach $1.1 billion deal
Date: 2024-09-11 Author: Кирило Загоруйко Categories: ECONOMY
The International Monetary Fund said it had reached a preliminary agreement with Ukraine to provide financial assistance worth about $1.1 billion.
Reuters writes that the agreement followed "tough" negotiations and is subject to approval by the IMF's executive board, which should happen in the "coming weeks."
The IMF is Kyiv's key international creditor, and its four-year $15.6 billion program is an important part of a larger package of global economic support for Ukraine as it prepares for a third winter in an attempt to counter a full-scale Russian invasion.
"Russia's war against Ukraine continues to have a devastating impact on the country and its people," Gavin Gray, who led the IMF monitoring mission in Kyiv, said in a statement. "Skillful policymaking, the adaptive capacity of households and firms, and robust external financing have helped maintain macroeconomic and financial stability."
The IMF, however, said risks to Ukraine "remain exceptionally high," with economic growth expected to slow, including due to the impact of the war on the labor market and Russia's ongoing attacks on energy infrastructure.
Kyiv spends about 60% of its budget on funding the army and relies heavily on financial support from Western partners to pay pensions and public sector salaries, as well as to finance social and humanitarian spending.
According to the Finance Ministry, Ukraine has received about $98 billion in financial assistance from its Western partners since the start of the war.
The IMF called on Kyiv to "adhere to fiscal constraints and debt sustainability targets" in its 2025 budget and to seek ways to increase domestic revenue.
Prime Minister Denys Shmyhal confirmed that Ukraine and the IMF agreed at the expert level on the fifth revision of the EFF program for $15.6 billion.
"All quantitative criteria and structural benchmarks were met by the end of June. These agreements demonstrate that Ukraine continues important reforms and international partners support us on this path. We expect the approval of this agreement by the IMF Executive Board. After that, Ukraine will receive $1.1 billion," the statement said.
He also recalled that this was the first IMF mission to fully operate in Kyiv during a full-scale invasion.
"Partner funds help our Government finance all non-military budget expenditures. This allows us to direct our internal resources to the country's defense capability," Shmyhal concluded.
