IMF lends additional $1.1 billion to Ukraine after fifth EFF review

The Executive Board of the International Monetary Fund (IMF) has completed the fifth review of the extended arrangement under the Extended Financing Facility (EFF) for Ukraine – Ukrainian authorities can now withdraw another tranche of 1.1 billion dollars (834.9 million SDR) to Ukraine, according to the IMF press. release reported on Friday the 18th.

The money will be used for budget support.

“The economy has been more resilient than expected in the first half of 2024, with continued growth, moderate inflation and adequate reserves reinforced by significant and continued external support,” the press release said.

The outlook for 2025 has worsened due to sustained Russian attacks on Ukraine’s energy infrastructure and uncertainty surrounding the war. Strikes in the energy sector have worsened real GDP growth to 2.5-3.5 GDP for 2025.

The IMF projects that Ukraine will end 2024 with a real GDP of 3%.

The authorities have met all quantitative performance criteria and indicative targets as of end-June and continuing. This includes achieving structural criteria relating to tax privileges, war-affected state-owned enterprises, customs reform and public investment management.

Two structural benchmarks have been reset to allow more time to complete the reform.

“Ukraine’s financing needs remain significant, due to the continuation of the war. Timely and predictable external support, on terms consistent with debt sustainability, is essential to close financing gaps and preserve stability. At the same time, decisive domestic revenue mobilization is essential for Ukraine,” the IMF said in its press release.

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The Fund also highlighted the success of the Eurobond exchange in Ukraine in August, the continued flexibility of the exchange rate under the managed exchange rate regime, the stability of the financial sector and the dynamics of reforms in fight against corruption and governance.

Ukraine’s 48-month EFF agreement with access of US$15.5 billion (SDR 11.6 billion)

was approved on March 31, 2023 and is part of a US$151.4 billion support package for Ukraine.