An International Monetary Fund (IMF) mission on Wednesday begins discussions with Ukraine’s representatives on a new full-fledged support program involving funding from the Fund.
“The IMF mission led by Gavin Gray begins discussions today with representatives of the Ukrainian authorities on a potential program to be supported by the IMF,” Vahram Stepanian, IMF Resident Representative in Ukraine, said in a statement.
Earlier, Ukrainian Finance Minister Sergei Marchenko announced the work of the IMF mission from March 8 to 15 in Warsaw.
“There we will agree on the terms and conditions, and filling, and volumes, and so on. Now it’s a little early to talk about specific details, because there are a lot of issues of internal discussion of the Fund,” said the head of the Ministry of Finance on March 1.
“I think we will find the necessary solutions so that in April we could have a full-fledged program with the Fund,” said Marchenko.
According to him, so far we are talking about a four-year program, whose task is to make the necessary policy adjustments so that Ukraine, which today spends 50% of its budget on military expenditures and the other 50% financed by the aid of partners, after the war came to a level of “more or less” self-sufficiency.
“The Fund does not yet put forward unbearable conditions that we cannot fulfill. We are talking about program, basic things: ensuring monetary and fiscal stability; reduction of the budget deficit and ensuring an acceptable level of burden on the budget and also good public administration and ensuring best corporate practices. And we are talking about anti-corruption programs, which have traditionally been part of IMF programs,” explained the head of the Ministry of Finance.
Prime Minister Denis Shmygal stated that the amount of the program may amount to $15 billion, of which Ukraine would like to receive $5 billion this year.
As earlier reported, last autumn, when the IMF was not ready to provide substantial financing at once, Ukraine requested a four-month Monitoring Program with Board of Directors (PMB) from the Fund, which the Fund approved on December 20.
An IMF mission concluded in Warsaw on Feb. 17, resulting in a statement that a staff-level agreement (SLA) had been reached to end that program early and move forward with preparations for a new, expanded program involving financing.
Kiev hopes that in the beginning of the second quarter of 2023, the PMB will be replaced by a multiyear extended funding program EFF amounting to about $15 billion, which can cover the gap in covering the $ 38 billion deficit of the state budget-2023, which is now, according to about $5-10 billion.
