The International Monetary Fund said on Tuesday it had reached a working agreement with Ukraine on a four-year financing package worth around $15.6 billion, providing the country with the funds it needs. need as the Ukrainians continue to fight the Russian invasion.
The agreement, which still needs to be ratified by the IMF’s board of directors, is the result of months of negotiations between the fund and the Ukrainian authorities. The IMF said its board is expected to discuss approving the package in the coming weeks.
IMF staff briefed board members on the deal, which would be the biggest loan to Ukraine since the start of the Russian invasion, gaining approval to start the financing process, a a source familiar with the matter told Reuters.
The fund, without giving details, says the deal should help deploy large-scale funding for Ukraine from international donors and partners. Generally, IMF loans provide access to support from the World Bank and other lenders.
“The economy is expected to recover gradually over the coming quarters as activity recovers from severe damage to critical infrastructure, although threats remain, including the risk of a further escalation of the conflict,” the official said. IMF spokesman Gavin Gray in a statement.
Currently, the IMF expects the change in Ukraine’s real gross domestic product in 2023 to increase from -3% to +1%, Gray added.
Ukrainian Prime Minister Denys Shmyhal welcomed the agreement and thanked the IMF for its support.
“In the context of a record budget deficit, this program will help us finance all critical expenditure and ensure macroeconomic stability, as well as strengthen our interaction with other international partners,” Shmyhal wrote on his Telegram channel. .
US Treasury Secretary Janet Yellen, who made a surprise visit to Ukraine last month, welcomed the deal after months of pushing the IMF to come up with a new financing package for Ukraine.
“An ambitious and properly packaged IMF program is essential to support Ukraine’s reform efforts, including strengthening good governance and reducing corruption risks, and providing much-needed financial support,” says the press release.
The fund changed its rules last week to allow new loan programs for countries facing “an exceptionally high degree of uncertainty”, without mentioning Ukraine.
If approved, as expected, the loan will be the IMF’s largest loan to a country embroiled in active conflict.
