Ukraine and the International Monetary Fund (IMF) have reached agreements at the expert level on the fifth review of the four-year extended financing program of the EFF for a total amount of 15.6 billion dollars. According to Prime Minister Denys Shmyhal, Ukraine can receive another tranche of $1.1 billion after the IMF Executive Board approves the deal, which is expected in the coming weeks.
Shmyhal emphasized that all quantitative criteria and structural beacons at the end of June were fulfilled, and this indicates the continuation of important reforms in Ukraine, despite the war. The Prime Minister also emphasized the importance of the support of international partners in financing non-military expenditures, which allows internal resources to be directed to the country's defense capability.
Negotiations with the IMF continued from September 4 to 10 in Kyiv, where the Fund's mission led by Gavin Gray held meetings with government officials, including Finance Minister Serhii Marchenko and National Bank Chairman Andriy Pyshny. The mission confirmed that the economic indicators of Ukraine remain stable, despite the devastating consequences of the war.
The IMF noted that the four-year EFF agreement continues to play an important anchor for economic policy amid extreme uncertainty. Real GDP of Ukraine grew by 6.5% in the first quarter of 2024, and inflation decreased to 5.4% in July. At the same time, Ukraine's gross international reserves remain at a sufficient level, reaching $42.3 billion as of September 1.
According to IMF recommendations, the 2025 budget should take into account financial constraints and debt sustainability goals, and domestic revenue mobilization efforts are critical to Ukraine's continued economic stability.
