Ukraine to receive $1.1 billion from IMF after sixth revision of cooperation program

The International Monetary Fund (IMF) Board of Directors has completed the sixth review of Ukraine's Extended Fund Facility (EFF) and approved a new tranche of $1.1 billion.

This was reported by Rubryka, citing the IMF and Ukraine's Ministry of Finance.

According to the Ministry of Finance, the funds will be disbursed shortly. With this latest tranche, Ukraine will have received nearly $5.4 billion from the IMF in 2024, bringing the total disbursements under the EFF to $9.8 billion.

"As a result of the successful review, Ukraine will receive a tranche of about USD 1.1 billion in the near future. This will bring the IMF's financing this year to almost USD 5.4 billion, and the total disbursement under the EFF will amount to USD 9.8 billion. I am grateful to the IMF team for the productive cooperation," said Ukrainian Finance Minister Serhii Marchenko.

The IMF commended the resilience of Ukraine's economy amid wartime conditions. Its report highlighted the adaptability of households and businesses despite heightened risks from attacks on energy infrastructure and challenges in the labor market.

Ukraine fulfilled five key conditions required for the sixth review of its cooperation program with the IMF:

• Adoption of amendments to the Customs Code.
• Review of pre-war policies and medium-term budget planning practices.
• Assessment of financial risks to stability and preparation of a contingency action plan.
• Analysis of district heating enterprises' financial status.
• Development of policies for managing state property in state-owned enterprises, including dividend and privatization strategies.

Additionally, Ukraine met three structural milestones ahead of schedule:

• Exempting the National Commission for the Regulation of Energy and Utilities from state registration procedures.
• Establishing a new supervisory board for Ukrenergo, with a majority of independent members.
• Amending the Law on the Accounting Chamber.

The IMF emphasized the importance of sustaining reforms, particularly in domestic revenue mobilization, to ensure macroeconomic stability and fiscal sustainability.

"Economic growth in 2024 has been upgraded given better than expected resilience to the energy shocks. However, a slowdown is expected in 2025 due to an increasingly tight labor market, the impact of Russian attacks on Ukrainian energy infrastructure, and continued uncertainty about the war. Inflation has risen recently, mainly due to food prices, while inflation expectations remain well anchored," said IMF Managing Director Kristalina Georgieva.

Georgieva also highlighted the importance of strictly implementing the approved 2025 state budget for economic stability and welcomed the National Bank of Ukraine's decision to raise the discount rate, urging continued exchange rate flexibility.

Reform Priorities

Georgieva noted the significance of continued reforms, including:

• Establishing a Supreme Administrative Court.
• Amending the Criminal Procedure Code.

The IMF projects Ukraine's GDP growth at 4% in 2024. However, growth is expected to slow to 2.5–3.5% in subsequent years due to military uncertainty, labor market challenges, and damage to energy infrastructure.

The Ministry of Finance reported that Ukraine has completed 35 structural benchmarks under the EFF program, 20 of which focus on fiscal reforms.

IMF Program

In March 2023, the IMF approved a four-year EFF program for Ukraine totaling $15.6 billion.

To date, five tranches amounting to $7.6 billion have been disbursed, including $900 million in March and $2.2 billion in July.

Ukraine expects to receive the next tranche of $1.1 billion by the end of December 2024.