Ukraine and the IMF agreed to revise the $15.6 billion EFF program

Ukraine and the IMF agreed to revise the $15.6 billion EFF program

Ukraine and the International Monetary Fund (IMF) have reached an agreement at expert level on a third review of the Extended Fund Facility (EFF) totalling US$15.6 billion

The Ukrainian authorities and International Monetary Fund (IMF) have reached staff-level agreement on an updated set of economic and financial policies for the third review of the 4-year Extended Fund Facility (EFF) Arrangement worth about USD 15.6 billion.

The staff-level agreement is subject to approval by the IMF Executive Board, expected in the coming weeks.

During 17-22 February 2024, IMF staff, together with representatives of the Ministry of Finance of Ukraine, the National Bank of Ukraine, and other authorities, held policy discussions on Ukraine’s performance under the EFF Arrangement. The meetings took place in Warsaw, Poland, and online.

“Ukraine met all structural benchmarks by the third review. This became possible due to the coordinated cooperation of the Ministry of Finance, National Bank of Ukraine and other authorities. A successful review of the EFF Arrangement paves the way for disbursement of about USD 880 million for Ukraine. Grateful to the IMF for its support and expertise, which allow us to strengthen Ukraine’s economic and financial stability”, noted Minister of Finance of Ukraine Sergii Marchenko.

In particular, prior to the third review, Ukraine has adopted a National Revenue Strategy, developed a roadmap for public investment management, and worked on measures to mobilise State Budget revenues for 2024.

The IMF staff highlighted the strong progress made by the Ukrainian authorities in performing their commitments under the EFF, as well as in maintaining macroeconomic and financial stability, which, together with external financing, contributed to the economic recovery in 2023.

The parties confirmed that the financing needs for the State Budget in 2024 remain significant. The need for external support reaches USD 37.3 billion. At the same time, the IMF staff noted that Ukraine stands ready to swiftly respond to shocks, and have already taken measures to maintain budget liquidity at the beginning of the year amid uncertainty about international support.

The Ministry of Finance of Ukraine remains committed to the wide-ranging reform plan that was set out in cooperation with the IMF and other partners. The implementation of these measures and policies will help to sustain macro-financial stability and facilitate the country’s European integration.

On 31 March 2023, the IMF Executive Board approved a new four-year Extended Fund Facility (EFF) for Ukraine with funding of USD 15.6 billion (SDR 11.6 billion).

This Arrangement is part of an overall support package for Ukraine from international partners worth about USD 122 billion. The State Budget of Ukraine has already received three tranches of the IMF EFF Arrangement totalling about USD 4.5 billion. In 2024, the EFF provides for USD 5.4 billion of budgetary assistance to Ukraine.

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