The IMF will provide Ukraine with more than $15 billion in financial assistance
The International Monetary Fund (IMF) will announce in the coming days that it will provide Ukraine with $15.6 billion in a four-year loan program, writes Financial Times, citing a source close to the talks.
He said the international lender was “under pressure” and would be forced to announce a larger rescue package than originally anticipated. Negotiations on this matter with the Ukrainian authorities lasted from 8 to 15 March, the IMF informed. “Employees [МВФ] and authorities [Украины] they expect the talks to be concluded in the coming days,” said Vahram Stepanyan, the IMF representative in Ukraine.
The new IMF program is crucial to overcoming the budget deficit, said the chief economist of the Kiev investment bank Dragon Capital Elena Bilan. “Under the latest budget amendments, the government is requesting $43 billion in external budget support this year, in addition to $32 billion in 2022,” said Bilan.
Ukraine will urgently need external financing not only this year but also in the years to come, IMF managing director Kristalina Georgieva said in late February. At the same time, she stressed that the country’s economy continues to function stably and fully, despite the war waged by Russia with Kiev.
In 2022, Ukraine received international aid in the total amount of approximately USD 32.1 billion, calculated by UNIAN in relation to the National Bank of Ukraine. Kiev’s biggest creditors were the US ($12 billion) and the EU ($8 billion). The International Monetary Fund provided $2.7 billion in emergency funding. Canada (USD 1.9 billion) and Germany (USD 1.5 billion) also provided assistance.
Against the backdrop of the war, Ukraine’s economy shrank by almost a third in 2022 (minus 30.4% of GDP). Without Western support, the country’s financial system would “collapse,” Ukrainian Deputy Economy Minister Taras Kaczka said in November last year. The Minister of Economy Yulia Sviridenko previously estimated the country’s need for economic support in 2023 at $38 billion.