IMF completes 6th EFF review for Ukraine, disburses 7th tranche of $1.1 bln
MOSCOW. Dec 23 (Interfax) - The International Monetary Fund (IMF) Executive Board completed the sixth review of the Extended Arrangement under the Extended Fund Facility (EFF) for Ukraine on Friday, enabling a disbursement of around $1.1 billion (SDR 834.9 million) to Ukraine, which will be channeled by the Ukrainian authorities for budget support, Ukrainian media quoted the IMF as saying in a statement on its website.
Sustained reform momentum, progress at domestic revenue mobilization, and timely disbursement of external support are essential to safeguard macroeconomic stability, restore fiscal and debt sustainability, and improve governance, the statement said.
"[...] The economy has remained resilient, reflecting the continued adaptability of households and firms, although risks are tilted to the downside due to headwinds from attacks on energy infrastructure and a tight labor market. Preparedness and contingency planning are key to enable appropriate policy action should risks materialize," IMF Managing Director Kristalina Georgieva was quoted as saying in the statement.
The IMF reiterated its estimate of a 4% GDP growth this year due to better than expected resilience to energy shocks with a slowdown to 2.5%-3.5% next year due to an increasingly tight labor market and a number of other factors.
The IMF sees the NBU's recent key policy rate hike as an appropriate step in response to the increased inflation rate that was stronger than expected.
"The NBU should stand ready to take further action should inflation expectations deteriorate. Allowing exchange rate flexibility will help strengthen the resilience of the economy to external shocks while safeguarding reserves," it said.
The IMF assesses the state of the Ukrainian financial sector as "stable," but indicates the need to be vigilant due to increased risks.
The Finance Ministry said that overall Ukraine has already fulfilled 35 structural EFF benchmarks, of which 20 in the fiscal sector.
As reported, Ukraine received the sixth EFF disbursement of $1.1 billion on October 23 this year, following the fifth review of the EFF launched in March 2023, which increased the amount of disbursements to $8.7 billion with the total scope of the program at $15.6 billion.
The EFF, which was updated following its fifth review, at Ukraine's request, saw the schedule of program reviews and disbursements based on their results amended. If earlier it envisioned only two reviews for 2025, in early March and late August with the allocation of disbursements for $917.5 million each following them, now next year's schedule includes four quarterly reviews, as it was this year. The eighth disbursement remained unchanged at $917.5 million after the seventh review in March, while the next three disbursements for the next year are $809.6 million, $539.8 million and $445.3 million, respectively.
