IMF Releases $500 Million to Ukraine After Review Clearance
The International Monetary Fund has approved a $500 million disbursement to Ukraine following the successful completion of the eighth review under its $15.5 billion Extended Fund Facility (EFF). With this, total disbursements under the programme now stand at $10.6 billion, bolstering Ukraine’s macroeconomic stability amid continued war-time challenges.
IMF Ukraine
The decision to release the ninth tranche of funding came after the IMF executive board reviewed Ukraine’s performance and commended the country’s economic management despite facing severe risks due to the ongoing Russian invasion. The board noted that the Ukrainian government has implemented sound fiscal policies and macroeconomic measures while demonstrating resilience under extreme stress.
EFF Review
Ukraine met all the key quantitative and structural benchmarks set for the March-end review. These included reforms in customs operations, improved digital tax reporting, and the publication of a long-awaited external audit of the National Anti-Corruption Bureau. While Ukraine had sought an extension on a few structural targets, such as the appointment of a new head for its customs agency, the IMF granted the leeway considering the broader compliance and reform progress.
The IMF reaffirmed that Ukraine continues to show strong commitment to structural improvements in public finance and governance. The fund projected economic growth for Ukraine to remain between 2% and 3% in 2025, though it acknowledged challenges from declining agricultural output and falling gas exports.
Budget and Debt Outlook
The $500 million released has been allocated to support Ukraine’s national budget, which is under pressure due to the war’s prolonged fiscal strain. Ukraine’s finance ministry confirmed the funds had already been integrated into its budget planning. A supplementary budget is also in preparation for later this year to account for emerging revenue gaps and wartime expenditures.
Meanwhile, the completion of the review paves the way for Ukraine to reopen negotiations on restructuring its GDP-linked sovereign bonds. Officials hope the successful IMF review will provide the credibility needed to unlock additional debt relief discussions and improve the country’s overall debt sustainability.
