The Executive Board of the International Monetary Fund (IMF) has completed the seventh review of the Extended Fund Facility for Ukraine. This was announced by the organization on March 28.
This is reported by Finway
According to IMF information, the decision allows Ukraine to access $0.4 billion, which “will be directed towards budget support.” Thus, the total amount of disbursements under the fund’s program will reach $10.1 billion.
“Ukraine’s performance under the program remains strong. All quantitative performance criteria as of the end of December and continuous indicators were met, as well as most structural benchmarks. The prior action to increase the excise tax on tobacco products was also completed, while the structural benchmark related to the enactment of the law on the establishment of the Supreme Administrative Court was met with a delay,” the fund’s conclusions state.
The organization notes that the Ukrainian authorities have requested to adjust the timing of IMF disbursements for better alignment with updated balance of payments needs. The overall program volume will remain unchanged.
Economic Forecasts and Challenges
The IMF also notes that economic growth in Ukraine in 2024 shows resilience; however, a slowdown is observed in the second half of the year. It is noted that in 2025, the slowdown will continue due to “an increasingly tight labor market, the impact of attacks on energy infrastructure, and ongoing uncertainty regarding the further course of the war.” The overall forecast remains “extremely uncertain.”
“Russia’s war in Ukraine continues to inflict devastating social and economic damage on Ukraine. Despite this, macroeconomic stability is being maintained thanks to sound policy design and significant external support,” says IMF Managing Director Kristalina Georgieva.
Georgieva also emphasized the importance of strengthening monetary policy, which the National Bank of Ukraine is pursuing, and urged readiness for further actions in case of worsening inflation expectations.
Recall that in February, IMF staff and Ukrainian authorities reached a staff-level agreement (SLA) on the seventh review of the four-year Extended Fund Facility (EFF) program amounting to $15.5 billion. This agreement, in particular, paved the way for the receipt of the eighth tranche of approximately $0.4 billion.