The IMF and Ukraine have agreed on the first review of the $8.1 billion program: the Fund’s key requirements
12 June 23:58
The International Monetary Fund and the Ukrainian government have reached a staff-level agreement on the first review of the new four-year $8.1 billion Extended Fund Facility (EFF) program. This decision must now be approved by the IMF Executive Board. This is reported on the Fund’s website, according to "Komersant Ukrainian"
If the board approves the review, Ukraine will gain access to a new tranche of approximately $690 million. After that, the total amount of disbursements under the program will rise to $2.2 billion.
What Ukraine and the IMF Agreed Upon
The IMF announced that a staff-level agreement has been reached. This means that the Fund’s mission and the Ukrainian side have agreed on an assessment of the program’s implementation, an updated reform schedule, and further commitments.
The final decision on the disbursement of funds must be approved by the IMF Executive Board.
Only after its approval will Ukraine be able to receive the next tranche of funding.
Ukraine has met key quantitative targets
According to the IMF’s assessment, Ukraine met all quantitative performance criteria and indicative targets as of the end of March.
However, not all structural milestones were met on time. The Ukrainian government implemented two of them late and missed one. To keep the program on track, the parties agreed on an updated reform schedule, corrective measures, and additional policy commitments.
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IMF downgrades Ukraine’s economic growth forecast
An IMF mission led by Gavin Gray held discussions with Ukrainian authorities as part of the first review of the EFF program and the 2026 consultations.
According to the Fund’s estimates, due to Russia’s ongoing war against Ukraine and additional external risks, particularly the consequences of the conflict in the Middle East, Ukraine’s GDP growth in 2026 could slow to 1.0–1.6%.
At the same time, the IMF notes that Ukraine has generally maintained macroeconomic stability thanks to the National Bank’s policies and extensive support from international partners.
What reforms must Ukraine implement
Under the updated IMF program, Ukraine has undertaken a number of commitments. These relate to tax policy, fiscal discipline, the energy sector, the fight against corruption, the management of state-owned enterprises, and the financial system.
- Taxes and the fight against the shadow economy
Strengthening tax discipline remains a key priority. Ukraine has committed to eliminating the VAT exemption for international parcels. This is intended to close a loophole for tax evasion and reduce the volume of non-essential imports.
Measures are also planned to combat abuses of international transfer pricing and the simplified tax system. This includes, in particular, combating business fragmentation and hidden employment.
Separately, the IMF expects reforms of the Economic Security Bureau and the State Customs Service.
- Fiscal Policy: Expenditure Control and Revenue Generation
Ukraine must curb excessive spending, mobilize domestic revenues, and increase domestic financing.
This is particularly important as spending on defense, security, and reconstruction will remain high. The IMF emphasizes that fiscal policy must remain disciplined even in wartime.
- Energy: Tariffs May Be Gradually Revised
A separate set of commitments concerns the energy sector. The Ukrainian government is preparing a roadmap for the gradual liberalization of the energy market.
The IMF notes that current tariffs for households have weakened the financial position of state-owned energy companies. Once social protection mechanisms for vulnerable households are in place, utility tariffs for households may be gradually adjusted.
Ukraine must also strengthen the independence of the NEURC.
- Anti-Corruption and State-Owned Enterprises
The IMF urges Ukraine to step up anti-corruption reforms and improve corporate governance in the public sector.
Priorities include ensuring the effective functioning of supervisory boards at state-owned enterprises and banks, as well as accelerating the competitive selection of executives.
- The banking sector remains resilient
The IMF notes that Ukrainian banks remain well-capitalized and liquid. At the same time, the government should continue working to strengthen the financial sector’s resilience and develop capital market infrastructure.
This should help Ukraine gradually expand domestic sources of financing and reduce its dependence on external support.
What is known about the new EFF program
The new four-year $8.1 billion Extended Fund Facility (EFF) program for Ukraine replaced the previous $15.6 billion program, which was launched in March 2023.
Under the previous program, Ukraine received nine tranches totaling $10.6 billion. The new program was agreed upon in light of the protracted war and the continued significant need for external financing.
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