The International Monetary Fund announced on Wednesday that it had reached a preliminary agreement with Ukraine that could pave the way for a loan program as the country seeks up to $20 billion to shore up its reserves and cover budget needs, Reuters and Bloomberg report, cited by Agerpres.
The agreement announced on Wednesday is an expert-level agreement that will require approval by the IMF’s board in the coming weeks and will “provide an anchor for macroeconomic policy and catalyze donor support,” the international financial organization said in a press release. release the press.
“Real policy implementation will pave the way for a program that is fully supported by the IMF,” said IMF mission chief Gavin Gray.
In its recommendations, the IMF urged the government in Kyiv to increase tax revenues, restore the local bond market and limit monetary financing.
Putin’s war destroyed the Ukrainian economy
The Russian invasion has destroyed Ukraine’s industrial base, agriculture and basic infrastructure, which could lead to an economic decline of almost 30 percent this year.
This deprived the government in Kyiv of the revenue it needed to finance basic needs, so it had to rely on international aid and a bond-selling program.
IMF experts expect the Ukrainian economy to stabilize next year, predicting growth of 1% under the “baseline scenario”, but adding that inflation will remain high at around 25%.
At the end of October, the director of the International Monetary Fund, Kristalina Georgieva, estimated that Ukraine’s external financing needs will amount to about three billion dollars a month until the end of 2023 under an optimistic scenario, but it is possible to reach five billion dollars a month if the Russian bombings intensify.
On Wednesday, Russia launched another massive attack on Ukraine’s infrastructure, with the bombing also knocking out the Republic of Moldova, a country for which the IMF unblocked a tranche of funding in September.
Ukraine wants to conclude a new loan agreement with the IMF no later than the first quarter of 2023.
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