The Ukrainian authorities and the International Monetary Fund (IMF) staff have reached staff-level agreement on an updated set of economic and financial policies for the second review of the 4-year Extended Fund Facility (EFF) Arrangement of about USD 15.6 billion.
The agreement is subject to approval by the IMF Executive Board in the coming weeks.
From November 6 to 10, 2023, IMF staff and representatives of the Ministry of Finance of Ukraine, the National Bank of Ukraine, and other authorities held a series of discussions on the Extended Fund Facility. The meetings were held in Warsaw (Poland) and online.
The IMF mission reviewed Ukraine's compliance with the conditions set forth in the EFF, namely in the areas of fighting and preventing corruption, the rule of law, monetary and fiscal policy, the financial sector, budget and tax policy, and the energy sector.
The IMF staff noted Ukraine's strong performance under the EFF program and its continued commitment to the overall reform agenda. The staff-level agreement paves the way for the IMF Executive Board to consider a decision to disburse a tranche of about USD 900 million (SDR 663.9 million) to Ukraine.
The IMF staff and Ukrainian authorities also held discussions in the framework of the 2023 Article IV consultation, focusing on medium-term policies to lay the groundwork for a sustained, resilient, and green recovery and support Ukraine on its path to the EU accession.
The IMF has also improved the expectations for Ukraine's macroeconomic outlook in 2023, with a revised real GDP growth forecast for Ukraine for 2023 to 4.5%, up from the previous estimates of 1-3% in the first EFF review.
"I am grateful to the International Monetary Fund for its trust and support at a time of great importance for Ukraine. Effective and well-coordinated cooperation with the IMF is one of the key levers in overcoming the consequences of russia's armed aggression against Ukraine. A successful revision of the EFF Arrangement could result in a financing of about USD 900 million for Ukraine.," said Minister of Finance of Ukraine Sergii Marchenko.
The Minister of Finance also emphasized that within the framework of the EFF, the Government of Ukraine continues to implement the structural reforms and prioritizes the support of economic stability and the restoration of Ukraine on its way to EU integration.
On March 31, 2023, the IMF Executive Board approved a four-year Extended Fund Facility for Ukraine with funding of USD 15.6 billion (SDR 11.6 billion). The IMF-supported arrangement forms part of a much larger international support package for Ukraine that now totals around USD 122 billion. The State Budget of Ukraine has already received two tranches of the IMF EFF Arrangement totaling about USD 3.6 billion.
Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members. A staff team discusses with officials the country's economic developments and policies.