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Sunday, April 14, 2024

IMF Initiates Second Review of Ukraine Program as Kyiv Seeks $41 Billion

The International Monetary Fund (IMF) has commenced its monitoring mission to evaluate Ukraine’s ongoing multibillion-dollar program, as the capital city, Kyiv, seeks more than $41 billion in international assistance to cover its budget deficit for the upcoming year.

Key Highlights:

  • The IMF mission has initiated policy discussions with Ukrainian officials regarding the $15.6 billion Extended Fund Facility (EFF) loan, which is a component of a $115 billion global support package aimed at bolstering Ukraine’s economy during its ongoing conflict with Russia.
  • Ukraine’s central bank governor, Andriy Pyshnyi, expressed commitment to a constructive analysis of their work and productive discussions on future steps. Pyshnyi highlighted the substantial progress made over the past 20 months in managing the challenges posed by the large-scale war. He emphasized the critical importance of maintaining IMF support for budget needs and Ukraine’s long-term development.
  • Ukraine, which applied to join the European Union shortly after Russia’s invasion in February 2022, considers EU membership a top priority.

Key Financial Updates:

  • Discussions during the IMF review will encompass the financial sector’s current status, the foreign exchange market, the results of the banking sector assessment, and strategies for financing the budget deficit.
  • Ukraine heavily relies on international aid to cover its budget shortfall and fund social and humanitarian expenditures.
  • Finance Minister Serhiy Marchenko revealed that securing financial support has become more challenging due to shifting global attention and escalating geopolitical tensions.
  • In the current year, the government has received $35.4 billion from international partners to bridge the budget gap, surpassing last year’s $31 billion figure, as per finance ministry data.
  • Prime Minister Denys Shmyhal has outlined plans to decrease the 2024 budget deficit target, citing improved economic growth forecasts and adaptability of businesses and the economy amid wartime conditions.
  • However, Ukraine still requires around $41 billion in international aid to address the budget deficit. The Ukrainian parliament is set to vote on the 2024 draft budget in the second reading this week.
  • This week, Kyiv anticipates receiving an assessment from the European Union on its progress toward meeting economic and legal criteria for accession talks. The EU’s focus lies on judicial reforms, anti-corruption measures, and efforts to enhance transparenc

For more updates stay tuned to FELA News!

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