The International Monetary Fund (IMF) Executive Board has completed the Sixth Review of Ukraine’s Extended Arrangement under the Extended Fund Facility (EFF), unlocking a disbursement of approximately $1.1 billion (SDR 834.9 million). These funds will be directed towards budget support, bringing total IMF disbursements under the program to $9.8 billion.
Ukraine’s EFF, approved on March 31, 2023, provides access to $15.5 billion (SDR 11.6 billion) as part of a $148 billion international support package. The program aims to ensure fiscal, external, and macro-financial stability amidst ongoing challenges, supporting economic recovery, governance reforms, and long-term growth as Ukraine advances toward EU accession.
The financial sector remains stable, but vigilance is needed given heightened risks. Progress on strengthening bank resolution and risk-based supervision, stress-testing frameworks and contingency planning should be sustained.
Despite difficult circumstances, Ukraine’s economic performance remains strong. All end-September performance criteria and structural benchmarks were met, along with a prior action on tax reform and most benchmarks due by end-December. Economic resilience has exceeded expectations in 2024, though risks persist due to labor market tightness, infrastructure attacks, and war-related uncertainties.
IMF Managing Director Kristalina Georgieva highlighted Ukraine’s resilience and effective policymaking amidst the war but emphasized the need for continued reforms. Key areas include domestic revenue mobilization, governance improvements, and maintaining debt sustainability. Recent tax reforms and the 2025 budget align with program goals, but strict budget execution is essential.
Inflation has recently risen, driven by food prices. The National Bank of Ukraine’s monetary tightening was deemed appropriate, with further action anticipated if inflation expectations worsen. Exchange rate flexibility is encouraged to bolster economic resilience.
Georgieva also stressed the importance of external support and swift agreements with external commercial creditors to reduce fiscal risks. Sustained progress in anticorruption and governance, including establishing a high public disputes court, remains critical.
The EFF forms a vital part of Ukraine’s strategy to navigate economic recovery and reconstruction while managing unprecedented challenges and preparing for EU membership.
