IMF approves $400 million tranche for Ukraine

The Executive Board of the International Monetary Fund (IMF) has completed the Seventh Review of Ukraine’s Extended Arrangement under the Extended Fund Facility (EFF), releasing an additional $400 million tranche that will support the country’s budget, according to a statement from the IMF press service.

“The IMF Board today completed the Seventh Review of the Extended Arrangement under the Extended Fund Facility (EFF) for Ukraine, enabling a disbursement of about $0.4 billion to Ukraine, which will be channeled for budget support,” the statement reads. This brings total disbursements under the IMF-supported programme to $10.1 billion.

The Fund emphasised that “sustained reform momentum, progress at domestic revenue mobilisation, as well as full and timely disbursement of external support during the program period are necessary to safeguard macroeconomic stability, restore fiscal and debt sustainability, and improve governance.” The IMF approved a four-year EFF programme with $15.5 billion in financing for Ukraine in 2023.

The IMF projects continued economic challenges, noting that “the slowdown [in Ukraine] is expected to continue in 2025.” Specifically, the country’s GDP is forecast to grow at 2-3% this year, accelerating to 4.5% in 2026 and 4.8% in 2027. Unemployment is expected to remain high at 11.6% in 2025, before gradually declining to 10.2% in 2026 and 9.4% in 2027.

“The programme remains fully financed, with a cumulative external financing envelope of $148.8 billion in the baseline scenario and $162.9 billion in the downside scenario, over the 4-year programme period,” said IMF Managing Director Kristalina Georgieva.

Georgieva welcomed Ukraine’s enactment of the tobacco excise tax law, which supports the authorities’ commitment to implementing the National Revenue Strategy. She called for “accelerated implementation of this strategy, including modernisation of the tax and customs services, reduction in tax evasion, and harmonisation of legislation with EU standards” to meet high-priority spending needs.

The Ukrainian authorities “continue working to complete their debt restructuring strategy” and are currently “focused on reaching agreement with the remaining holders of external commercial claims, including GDP warrants,” Georgieva added. “Reaching agreement consistent with the programme’s debt sustainability objectives is essential to reduce fiscal risks and create space for critical spending,” she stressed.

The IMF Managing Director also emphasised that “sustained progress in anticorruption and governance reforms is needed. Additional efforts are required, including appointment of the new head of the Economic Security Bureau, completing the audit of the National Anti-Corruption Bureau, strengthening AML/CFT frameworks, and amending the criminal procedure code.”​​​​​​​​​​​​​​​​