The IMF expects Ukraine to mobilize domestic resources, and international donors

The Ukrainian economy is recovering, and financial and economic stability is maintained, the IMF says. On Tuesday, the Executive Board of the Fund approved the second review of the aid program for Ukraine, which opens access to the next credit tranche of almost 900 million dollars. Ukraine is expected to receive the funds by the end of the year.

The assistance is also important given the uncertainty with the approval of additional funding to support Ukraine in the US Congress. If the U.S. direct budget aid request is approved, it would amount to $11.8 billion next year. Currently, US funds for direct budget support of Ukraine have been exhausted, according to reports from the US government. This week, the EU is also considering a €50 billion four-year support program for Ukraine.

“It is critically important that external financing on preferential terms comes in a timely and predictable manner, and the pace of reforms is maintained,” said IMF Managing Director Kristalina Georgieva, commenting on the approval of the new tranche. She also emphasized the “extreme uncertainty” of forecasts due to the war.

The IMF estimates the total need for external funds for Ukraine at the level of 42 billion dollars next year. Responding to the Voice of America’s question about the risks for international support to Ukraine, the head of the IMF mission in Ukraine, Gavin Gray, said that the Fund “expects all donors to fulfill their obligations.”

Speaking to the press on December 11, Gray added that “the risks to external financing are there, but they are not necessarily higher than before” and noted the stable funding of economic support from international donors, which continues.

Regarding expectations from Ukraine, before the third review of the program, which is scheduled for spring, the Fund expects a gradual reduction of the budget deficit, in particular within the framework of the National Revenue Strategy, which the government should develop, as well as debt restructuring measures to private creditors.

“The war is ongoing and it is putting pressure on Ukraine’s public finances,” says Georgieva. “Timely receipts from outside, continued efforts in the domestic market are the key to ensuring Ukraine’s financing needs and maintaining macroeconomic and financial stability.”

The Fund noted the efforts of the government of Ukraine to combat corruption, in particular to ensure the independence of anti-corruption institutions, as well as the approval of legislation on the declaration of assets.

President of Ukraine Volodymyr Zelenskyy welcomed the approval of a new tranche for Ukraine during a meeting with Georgieva on Monday, the IMF reported. Georgieva, in her turn, at the meeting emphasized the successes of the Ukrainian government in the economic sphere.

“With the much-needed support of the international community, Ukraine was able to implement and support a strong economic policy,” Georgiyeva said.

“The authorities also continue to demonstrate Ukraine’s commitment to solving vital issues of governance and overcoming corruption. This is an important testimony to the leadership of President Zelensky, the skillful strategy of his economic team and the ability to carry out reforms,” ​​the official added.

During his visit to Washington, President Zelenskyi plans to meet with US President Joe Biden, American lawmakers on Tuesday.