IMF approves $690 million for Ukraine’s budget gap

The IMF Board acknowledged that Ukraine „has maintained macroeconomic and financial stability despite the ongoing war.” It was noted, however, that the country’s economic outlook has deteriorated, primarily due to the intensification of attacks on critical infrastructure and the repercussions of the war in the Middle East.

„The pace of reform implementation has slowed, and several structural benchmarks were completed with a delay or were not met.” Nevertheless, according to the IMF, the fulfilment of conditions necessary to release the next tranche of aid was „generally satisfactory.”

The IMF meeting took place on Monday and followed an agreement reached with the authorities in Kyiv last month, which concerned a „revision of the reform implementation schedule, the establishment of corrective measures aimed at eliminating delays, and additional policy commitments.”

The prolonged war is straining the Ukrainian economy and causing a significant increase in the budget deficit. The government in Kyiv is seeking new sources of revenue to bridge the budget gap, which is currently largely financed by foreign partners, including the IMF.

As stated by the IMF Managing Director, Kristalina Georgieva, maintaining macroeconomic stability remains a priority for Ukraine in the near future. She called for the pursuit of „prudent fiscal and monetary policies” and for „taking measures aimed at ensuring the resilience of the financial sector.”