The mission of the International Monetary Fund regarding the fifth review of the Extended Fund Facility (EFF) program with Ukraine, which worked in Kyiv from September 4 to 10, 2024, has completed its work.
This is stated in the message of the NBU, the Ukrainian News agency reports.
The representatives of the IMF and the Ukrainian authorities reached a Staff-Level Agreement (SLA).
The relevant agreement must be approved by the IMF Board of Directors, which will consider it in the coming weeks.
After that, Ukraine will get access to financing in the amount of SDR 834.8 million (about USD 1.1 billion equivalent).
The IMF emphasized that the policy of the Ukrainian government, the high adaptability of the population and business, as well as stable external financing made it possible to support macroeconomic and financial stability.
Real GDP in the 1st quarter of 2024 grew by 6.5% y/y, and international reserves were sufficient - at the level of USD 42.3 billion as of September 1.
According to the Fund's forecast, economic growth in Ukraine will slow down in the second half of 2024 due to the consequences of russian attacks on the energy infrastructure, the impact of the war on the labor market and the level of business activity expectations.
The real GDP growth forecast for 2024 is at the level of 3%, and inflation is up to 9%.
Solving the problem of electricity shortages on the eve of winter is critically important and requires coordinated efforts, including with the participation of international partners.
Economic growth in 2025 is predicted by the Fund at the level of 2.5-3.5%.
At the same time, the risks of the forecast are extremely high.
The IMF also noted the stability and liquidity of the financial sector and the rapid pace of reforms, despite the hardships of martial law.
In order to preserve financial stability and increase preparedness for potential shocks, the priority is to strengthen the system of bank rehabilitation, contingency planning and bank management.
Opportunities for further easing of monetary policy until the end of the year have decreased due to the risks of rising inflation, however, the policy of the NBU is adequate and consistent with the achievement of the inflation target in the medium term.
The exchange rate should continue to act as a shock absorber and adjust to fundamental market factors, contributing to maintaining external stability.
Adequate monetary policy combined with a regime of managed exchange rate flexibility should help prevent excessive exchange rate fluctuations and imbalances in exchange rate and inflation expectations.
It is also important to maintain a balanced and phased approach to the easing of currency restrictions in accordance with the approved Strategy and to coordinate it with the general set of economic policy measures.
As the Ukrainian News agency earlier reported, on March 31, 2023, the Board of Executive Directors of the International Monetary Fund approved a four-year program of expanded financing for Ukraine.
The program is implemented in two stages (war and post-war) and provides access to credit funds from the IMF in the amount of 11.6 billion SDRs (equivalent to USD 15.6 billion).
Tranches under the program are provided based on the results of viewings.
In 2023, Ukraine received three tranches from the IMF for a total amount of SDR 3.3 billion (USD 4.5 billion).
This year, Ukraine has already received two tranches from the IMF in the amount of SDR 2,333.72 million (about USD 3.08 billion equivalent).
And in general, in 2024, the government will be able to receive four tranches from the IMF with a total volume of SDR 4 billion (USD 5.4 billion equivalent).
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