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IMF reaches agreement with Ukraine to disburse USD2.2B in aid amid current conflict
(MENAFN) On Friday, the International Monetary Fund (IMF) announced it had reached an agreement with the Ukrainian government regarding the fourth review of the existing aid program designed to support the war-torn country. This agreement paves the way for the disbursement of an additional USD2.2 billion. The IMF noted in a statement that this agreement now awaits approval from the fund’s board of directors, which is anticipated to convene in the coming weeks.
This forthcoming disbursement represents the fourth tranche of a substantial USD15.6 billion aid program, which was established in March 2023 as part of a larger international assistance plan totaling USD122 billion. The most recent review of the aid program occurred just two months ago, resulting in the release of USD880 million. The IMF praised Ukraine's performance under the program, highlighting the country's resilience despite the ongoing conflict stemming from the Russian invasion that began in February 2022.
Following a severe economic downturn in 2022 due to the war, the IMF forecasts a 3.2 percent growth in Ukraine's economy for this year. The fund also commended the Ukrainian authorities for their progress in restructuring external debt, which is deemed crucial for creating budgetary space for essential expenditures and restoring debt sustainability.
However, the IMF cautioned that the ongoing conflict would continue to have significant economic repercussions. It specifically pointed to a potential slowdown in economic activity due to widespread attacks on the energy sector and warned of a possible moderate rise in inflation driven by diminished confidence.
This forthcoming disbursement represents the fourth tranche of a substantial USD15.6 billion aid program, which was established in March 2023 as part of a larger international assistance plan totaling USD122 billion. The most recent review of the aid program occurred just two months ago, resulting in the release of USD880 million. The IMF praised Ukraine's performance under the program, highlighting the country's resilience despite the ongoing conflict stemming from the Russian invasion that began in February 2022.
Following a severe economic downturn in 2022 due to the war, the IMF forecasts a 3.2 percent growth in Ukraine's economy for this year. The fund also commended the Ukrainian authorities for their progress in restructuring external debt, which is deemed crucial for creating budgetary space for essential expenditures and restoring debt sustainability.
However, the IMF cautioned that the ongoing conflict would continue to have significant economic repercussions. It specifically pointed to a potential slowdown in economic activity due to widespread attacks on the energy sector and warned of a possible moderate rise in inflation driven by diminished confidence.
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