Ukraine has applied to the International Monetary Fund (IMF) for support in covering the financial gap to keep the economy functioning in the amount of $5 billion per month for the next three months, and the IMF will assist in raising these funds, said Fund Managing Director Kristalina Georgieva .
“The first priority is to provide support to fill this financial gap in Ukraine over the next three months,” she said at a press conference in Washington on Wednesday.
“Let me emphasize that this $5 billion is for keeping the economy functioning, not for Ukraine’s recovery needs, which will be huge,” Georgieva added.
She noted that the Fund has worked very closely with the Ministry of Finance of Ukraine regarding these estimates provided by them and there is some uncertainty about this amount, but, according to the IMF, it does not go beyond the likely needs of the country.
“What we are doing is working with our partners to ensure that this kind of support is mobilized through various channels and further work on detailing specific needs and how those needs can best be met,” the IMF chief said.
Georgieva recalled that the Fund has created and will administer a special administrative account to send money from donor countries to help Ukraine. “We already have one contribution to this effect and others can contribute. We look forward to it,” added the Managing Director.
She noted that such large funding for Ukraine is important for obvious reasons: most of the economy is not working, the Fund predicts about a 35% decline in GDP this year. “And so filling this financial gap is best done by relying on grant funding, and this is what we want to see in order to raise funds for Ukraine in search of financial support,” said Georgieva.
According to her, the IMF is already discussing a follow-up program for Ukraine.
“Of course, we have very high uncertainty right now, but it should not prevent us from starting work on a support package for Ukraine in the future,” Georgieva stressed.
She clarified that this program, which the Fund can begin to structure for the future, will not be submitted to the board of directors while hostilities are still ongoing. “Because it is unfair to expect the Ukrainian authorities to develop a massive package of reforms. They are doing the right thing now, focusing on what matters most at the moment, namely keeping the economy functioning, and they are doing a really good job,” said the head of the IMF , expressing admiration for the work of the Ukrainian economic bloc consisting of the Ministry of Finance and the National Bank to maintain macroeconomic and financial stability in the country at war.
As reported, on March 9, the IMF approved Ukraine’s request for $1.4 billion in emergency financing under the Rapid Financing Facility (RFI) and transferred the money to the country the next day.