The International Monetary Fund (IMF) has given approval for Ukraine to receive an $890 million tranche of funding, following the first review of the extended arrangement under the Extended Fund Facility (EFF) for Ukraine. The funds are intended to support Ukraine’s budget. The IMF-supported program aims to maintain fiscal, external, price, and financial stability to support economic recovery in the context of reconstruction and Ukraine’s path to European Union accession, and to enhance governance and strengthen institutions to promote long-term growth.
Ukraine’s economy contracted by around 29% last year, and the fluidity of the conflict means there is uncertainty about the economic outlook. Damage to the country’s infrastructure was estimated at $138 billion as of December 2022, equivalent to 70% of its gross domestic product in 2021, according to the Kyiv School of Economics.
This funding is a boost for Ukraine’s economy, which has been severely impacted by the ongoing conflict with Russia. The new tranche of funding will help Ukraine continue to implement the necessary reforms to secure long-term economic growth and stability, including measures to tackle corruption, improve governance, and promote private sector development. However, the IMF has warned that the uncertain economic outlook and ongoing conflict pose significant risks to Ukraine’s economic recovery.
Ukraine will need to continue to implement reforms and maintain a stable political and economic environment to attract investment and support economic growth. In summary, the IMF funding is a positive development for Ukraine, providing a much-needed boost to the country’s economy as it continues to recover from the impact of the conflict with Russia. Ukraine will need to continue to implement reforms and maintain a stable political and economic environment to build on this progress and ensure long-term economic growth and stability.