Ukraine to receive $1.1 billion from the IMF: fifth review of the EFF program completed

Today, the Executive Board of the International Monetary Fund (IMF) completed the fifth review of the Extended Fund Facility (EFF) program for Ukraine. The IMF management noted significant progress by the Ukrainian side in meeting the program’s conditions. This marks the first time in the history of cooperation with the IMF that Ukraine has successfully completed five reviews of its financial program.

Fulfilled commitments

Ukraine has met all structural benchmarks set before the fifth review, as well as two commitments ahead of schedule. A total of five obligations were fulfilled:

1. Development of a methodology for assessing the effectiveness of tax incentives.
2. Adoption of a new law on the Bureau of Economic Security.
3. Identification of key public companies seriously affected by the war and preparation of an analysis of potential fiscal and quasi-fiscal costs.
4. Adoption of amendments to the Customs Code in accordance with international best practices (ahead of schedule).
5. Adoption of a government resolution based on the roadmap for developing public investment management procedures (ahead of schedule).

In total, Ukraine has already fulfilled 28 structural benchmarks under the EFF program, of which 19 are in the fiscal area.

Importance of the EFF program

“The EFF program is the most effective for Ukraine in terms of the number of successful reviews. It demonstrates Ukraine’s capability and readiness to implement changes even amid full-scale war,” said Ukraine’s Minister of Finance Serhiy Marchenko. He also emphasized that cooperation with the IMF is essential for maintaining fiscal and monetary stability.

Next steps

The successful review opens the way for Ukraine to receive a tranche of approximately $1.1 billion in the near future. Additionally, the schedule for tranches for 2025 has been optimized, allowing for more funds to be attracted to the state budget.

It should be noted that five tranches totaling about $7.6 billion have already been received by the State Budget of Ukraine under the EFF program, with approximately $3.1 billion in 2024. The program provides for $5.4 billion in budget assistance to Ukraine in 2024.

Reference

On March 31, 2023, the IMF Executive Board approved a four-year EFF program for Ukraine with financing of approximately $15.6 billion. The program is part of an international support package for Ukraine totaling around $151 billion for 2023-2027.