The executive board of the International Monetary Fund (IMF) on Thursday approved a third review of Ukraine's $15.6 billion loan program, allowing the disbursement of $880 million in budget aid bringing the total disbursement to $5.4 billion, the IMF said.
The global lender said the risks facing Ukraine remained very high, particularly uncertainty over war with Russia and the prospect of external funding, although Ukraine mission chief Gavin Gray said the agency expected the war in Ukraine to subside by the end of this year.
Gray told reporters that Ukraine's overall performance in the Extended Fund Facility program with the IMF remained strong during the first year, and Kyiv had met all but one of the quantitative performance criteria. One criterion that is not met is a small amount of tax revenue.
Ukraine will receive the funds in the coming days, Gray said. The news should be welcome news, as the US Congress continues to debate approval of an additional $61 billion aid package for Ukraine. Gray said the IMF should study the impact on Ukraine's debt levels if US congressmen decide to turn some of the funds into loans rather than grants.
Sanaa Nadeem, the IMF's deputy chief of mission for Ukraine, said that the IMF had approved a sustainability debt analysis for Ukraine that did not materially change the country's macroeconomic analysis, but the new analysis did not include a $3 billion debt owed to Russia that had been disputed by Ukrainian authorities.
Nadeem told reporters that credible progress had been made in restructuring Ukraine's commercial debt, and the IMF hoped technical discussions on the matter could take place in the next few weeks.
Ukraine's economy in 2023 remains stronger than projected. However, challenges appear to emerge again in 2024 where the country's economic growth is predicted to weaken to the 3% to 4% range as uncertainty about war and supply restrictions strengthens. (ps/rs)