The plan would allow “sustaining the gradual economic recovery while creating the conditions for long-term growth, in a context of post-conflict reconstruction (with Russia, ndlr) and with a path towards accession to the European Union”the IMF pointed out in a statement.
The Extended Facility Facility (EFF) agreement has a duration of 48 months and includes a requested access of 11.6 billion in SDRs, which constitutes 577% of the country’s quota.
The head of mission of the International Monetary Fund (IMF) for Ukraine, Gavin Gray, stressed that “The staff-level agreement reflects the IMF’s continued commitment to supporting Ukraine and is expected to help mobilize large-scale concessional financing from Ukraine’s donors and international partners for the duration of the program.”
Gray clarified that, although there was an agreement with the Ukrainian government, its approval is subject to the decision of the Executive Board of the IMF. “The Board is expected to consider it in the coming weeks,” he said.
Regarding the current situation in Ukraine, Gray remarked that in addition to the “terrible humanitarian cost, the Russian invasion of Ukraine continues to have a devastating impact on the economy: activity contracted by 30 percent in 2022.”a large part of the capital stock was destroyed and poverty levels increased”.
In addition, he pointed out that acute macroeconomic challenges persist “due to the magnitude of the shock and the expansion of the fiscal deficit.” “Nevertheless, the authorities have managed to maintain macroeconomic and financial stability, thanks to significant external support and skillful policy making,” he added.
Regarding the evolution of the fiscal accounts of Ukraine, the head of the mission of the IMF It said “a gradual economic recovery is expected over the next few quarters” as activity recovers from severe damage to critical infrastructure. However, he made it clear that headwinds persist “including the risk of further escalation of the conflict.” That is why the IMF staff forecast a variation in GDP that could be around between -3 and a positive 1%, as a result of the ups and downs generated by the war.
Regarding the objectives of the program, the Fund executive stressed that it is a priority to maintain economic and financial stability “in circumstances of exceptionally high uncertainty.” Also, he focused on “restore debt sustainability and support Ukraine’s recovery on the road to post-war EU membership.”
Source: Ambito
