Experts of the International Monetary Fund (IMF) and the authorities of Ukraine reached a staff-level Agreement on an updated package of economic and financial policy measures for the first review of the 4-year Extended Fund Facility (EFF) Program.
This is stated in the message of the IMF, Ukrainian News Agency reports.
The staff-level agreement is subject to approval by the IMF Board of Executive Directors.
All quantitative performance benchmarks at the end of April and structural beacons at the end of May were met, paving the way for the Board of Executive Directors to consider the allocation of approximately USD 900 million (SDR 663.9 million).
Ukraine's economy is noted to be remarkably resilient, and recent economic developments point to a gradual economic recovery in 2023, although the outlook remains highly uncertain as extremely high uncertainty related to the war remains.
In addition, significant challenges remain: the budget deficit remains very high, which creates a large need for external financing, which is provided by external grants and loans on a highly concessional basis.
The need to protect the core functions of the state in the context of existing financial constraints will continue to require the authorities to continue to seek difficult compromises regarding measures.
Crucial to this goal will be the repeal of the amendments to the martial law revenue mobilization legislation, while avoiding new measures that could lead to a reduction in tax revenues.
IMF experts raised their real GDP growth forecast for 2023 from 1 to 3 percent (from the previous range of -3 to +1 percent at the time of the approval of the EFF Program), however, given that the war continues, the outlook remains extremely uncertain.
As Ukrainian News Agency earlier reported, at the beginning of April 2023, the Board of Directors of the International Monetary Fund approved a new four-year extended financing program (Extended Fund Facility - EFF) for Ukraine in the amount of USD 15.6 billion (SDR 11.6 billion).
The first phase, scheduled for 2023-2024, will focus on implementing a credible budget for 2023 and increasing revenue mobilization, including by avoiding measures that could reduce tax revenues.
The first stage also involves reducing inflation and maintaining the exchange rate, including through the support of relevant foreign exchange reserves.
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