IMF approves $8.1 billion program for Ukraine: what is known
27 February 00:43
The International Monetary Fund (IMF) has approved a new four-year Extended Fund Facility (EFF) program for Ukraine worth $8.1 billion. This was announced by Prime Minister Yulia Svyrydenko, according to "Komersant Ukrainian".
Ukraine will receive the first tranche of approximately $1.5 billion in the near future.
What will the funds be used for?
According to Svyrydenko, the first tranche will be used for:
- financing the state budget deficit;
- supporting macro-financial stability;
- ensuring the fulfillment of social obligations.
The IMF program is part of a broader financial framework that provides for covering Ukraine’s projected budget deficit of $136.5 billion over four years.
Why the IMF program is key
The government emphasizes that the new cooperation program with the IMF is the “anchor” for all international financial support to Ukraine.
In particular, it opens up the possibility of receiving:
- up to €90 billion in financing from the European Union;
- support from the G7 countries;
- loans from international financial institutions;
- debt relief on official obligations.
Reforms as a condition for financing
The program provides for the continuation of structural reforms aimed at:
- maintaining macroeconomic stability;
- reforming the tax system;
- increasing the transparency of fiscal policy;
- strengthening the financial sector.
According to the government, the issue of taxation of individual entrepreneurs was also raised in negotiations with the IMF, in particular the possible introduction of VAT for individual entrepreneurs as one of the conditions for further cooperation.
What this decision means for the economy
Approval of the IMF program:
- guarantees the stability of budget financing;
- strengthens the confidence of international partners;
- stabilizes the currency market;
- reduces the risks of a public finance deficit.
Economists note that IMF support is a signal to other donors and investors about Ukraine’s financial capacity to meet its obligations.
The new four-year IMF program worth $8.1 billion is a key part of the financial support for Ukraine during the war and reconstruction. The first tranche of $1.5 billion is expected soon.
