IMF insists on domestic revenue mobilization in new program with Ukraine

MOSCOW. Oct 20 (Interfax) - It is important for Ukraine to continue reform efforts, because reforms on the anti-corruption side, on governance and on strengthening institutions are crucial in terms of Ukraine's post-crisis restoration and as part of the process of accession to the European Union, Ukrainian media reported citing Director of the International Monetary Fund's (IMF) European Department Alfred Kammer.

"These structural reforms efforts need to be carried out. And I should say one part of the program is clearly focused on domestic revenue mobilization," Kammer was quoted as saying at a press briefing in Washington on Friday.

Donors are providing substantial support to Ukraine, but Ukraine also needs to support its budget through determined efforts to raise revenue, he said.

"We need to look at revenue measures which are durable, and I am stressing the word 'durable', because this is again to set up Ukraine for the reconstruction phase, and that is to set up well Ukraine in for becoming a modern state as part of the EU accession," Kammer said.

Negotiations on Ukraine's new program with the IMF are going actively, but they are still in the initial stages, he said.

The parties are also discussing Ukraine's public debt, its growth and ways to ensure debt sustainability by the end of the program, including in conditions of larger imports due to the crisis.

As reported, Ukrainian Finance Minister Sergei Marchenko earlier estimated the Ukrainian budget's external financing needs for 2026 at $45.5 billion, and total external financing for the duration of the new four-year program with the IMF at $150 billion to $170 billion. According to Marchenko, around $60 billion in external financing needs for 2026-2027 is yet to be covered.

The current four-year Extended Fund Facility with the IMF of $15.6 billion, approved in March 2023, initially provided $115 billion in total external financing for Ukraine in the baseline with international donors' support and $140 billion in the worst-case scenario, but as the crisis dragged on, these figures were increased to $153 billion and $165 billion, respectively.