IMF approves $1.1bn budget support for Ukraine

The IMF’s executive board approved a $1.1 billion payout for Ukraine on Friday, which it says will be used to provide budget support to the war-torn country.

The loan disbursal is the latest tranche of funding the International Monetary Fund has released to Ukraine as part of an ongoing 4-year, $15.5 billion program approved last March.

The approval of the Fund’s fifth loan review brings the total amount disbursed to Ukraine since then to $8.7 billion.

“Russia’s war in Ukraine continues to bring a devastating social and economic toll on Ukraine,” IMF Managing Director Kristalina Georgieva said in a statement.

“Despite the war, macroeconomic and financial stability is being preserved through skilful policymaking by the Ukrainian authorities as well as substantial external support,” she added.

“The economy has remained resilient, despite significant damage to the energy infrastructure, reflecting the continued adaptability of households and firms.”

The IMF announced that Ukraine had met all of the relevant targets, including structural reforms relating to tax privileges, public companies, and customs reform.

Ukraine’s economy had been “more resilient than expected” in the first half of the year, with good domestic data “bolstered by continued sizeable external support,” according to the IMF.

But it warned that the outlook through the end of next year had worsened, “largely due to sustained Russian attacks on Ukrainian energy infrastructure and uncertainty about the war.”

It added that the economic outlook remained subject to “exceptionally high uncertainty.”

AFP