Ukraine will receive $890 million IMF tranche: Fund completes first review of program
The IMF Board of Directors has completed the first review of the Extended Fund Facility (EFF) program for Ukraine - Ukraine will receive about USD 890 million to be used for budget support.
This is stated in the message of IMF, reports Censor.NЕТ with reference to Economic truth.
The Fund recalled that the Extended Fund Facility was approved by the IMF Board of Directors in March 2023 and is part of a total package of support for Ukraine worth $ 115 billion.
"The authorities have made significant progress in meeting their commitments under the EFF program in a challenging environment, meeting all relevant performance criteria by the end of April and structural benchmarks by the end of June, and remain committed to the program.
Continued strong commitment and reform momentum are needed to preserve macroeconomic stability, strengthen institutional reforms and support recovery efforts, and to help Ukraine on its path to EU accession," the statement said.
This, as emphasized by the IMF, implies
- maintaining a strong tax revenue base ("including by refraining from measures that could undermine the tax base")
- maintaining sustainable disinflation and exchange rate stability, and supporting the health of the banking sector,
- promoting important governance and anti-corruption reforms, including asset declaration, anti-money laundering and countering the financing of terrorism.
"It is also vital that external financing for budget support continues on appropriate concessional terms to protect macroeconomic stability and ensure that recovery projects are financed on terms consistent with fiscal and debt sustainability," the release said.
The Fund emphasized that, despite the war, Ukraine's economy is showing greater resilience than expected after a sharp contraction in 2022.
"The GDP growth forecast for 2023 has been raised to 1-3 percent as domestic demand recovers, inflation slows, and foreign exchange reserves remain high amid a stable FX market. In general, macroeconomic and financial stability is maintained thanks to prudent policies, as well as continuous and timely external support," the Fund added.
As a reminder, the IMF Executive Board has approved a four-year, $15.6 billion financing package for Ukraine to help the country meet its urgent financial needs amid the ongoing war. In total, this year Ukraine can receive three tranches from the IMF totaling SDR 3.3 billion (USD 4.5 billion). Subsequently, the IMF published 19 structural benchmarks that Ukraine promised to fulfill as part of a $15.6 billion cooperation program.
