Ukraine will not raise energy tariffs: IMF did not make such a demand
21 October 2024 22:29
The updated Memorandum of the International Monetary Fund following the fifth review of the Extended Fund Facility (EFF) does not commit Ukraine to raising energy tariffs. This was reported by the Ministry of Finance of Ukraine, according to "Komersant Ukrainian"
“The Ukrainian side, together with IMF experts, is considering possible options for maintaining the country’s energy stability, given the significant damage caused by Russia to Ukraine’s energy system and, as a result, the impact on Ukraine’s economic recovery. The IMF memorandum includes various potential options for reforming the energy system,” the Ministry of Finance said.
The Ministry clarified that Ukraine has already undergone five reviews of the programme, and each time the IMF’s requirements are updated.
The Memorandum of 24 March 2023, which was published after the programme was approved, as well as its five subsequent updates after each review, included a section on energy sector reform. All updates to the Memorandum considered the potential for an increase in energy tariffs as a measure to address the problems in the energy sector caused by a full-scale war. However, such a measure is only possible if sufficient and targeted resources are allocated to protect vulnerable households.
The memorandum of 18 October 2024 repeats potential measures that were included in previous updates, does not propose new ones, and does not create obligations for Ukraine to increase energy tariffs during the war.
It should be noted that the International Monetary Fund has updated its forecast for the end of Russia’s war in Ukraine. According to the new report, the war will last until the end of 2025 at best.
