The International Monetary Fund has reached a preliminary agreement with Ukraine, which will provide the country with access to financial assistance in the amount of about 1.1 billion dollars, reports "Reuters", quoted by News.bg.
The agreement was reached after “difficult” negotiations, as defined by Kyiv, and is subject to approval by the fund's executive board. This is expected to happen in the “next weeks”.
The IMF is a key international lender to Kiev, and its four-year, $15.6 billion program is a crucial part of a larger global economic package to support Ukraine as it prepares for a third winter in a bid to fend off a full-scale invasion of Russia.
„Russia's war in Ukraine continues to have a devastating impact on the country and its people,” said Gavin Gray, head of the IMF's monitoring mission in Kyiv for the fifth review of the credit program.
„Skillful policy-making, the adaptability of households and businesses, as well as stable external financing helped maintain macroeconomic and financial stability,” he pointed out.
However, the IMF warned that the risks for Ukraine “remain extremely high” with an expected economic slowdown due to the war's impact on the labor market and Russia's continued attacks on energy infrastructure, among other factors.
Kiev spends about 60% of its state budget on funding the military and relies heavily on financial aid from its Western partners to pay pensions and salaries to public sector workers, as well as cover social and humanitarian costs.
Since the beginning of the war, Ukraine has received financial assistance in the amount of about 98 billion dollars from its Western partners.
The IMF called on the government in Kyiv, which President Volodymyr Zelensky reshuffled last week, to “respect financial constraints and debt sustainability targets” in the 2025 budget and look for ways to increase domestic revenue.
The government previously announced plans to raise taxes and has already implemented other fiscal measures, including increases in import duties and excise taxes.
Ukraine also reached an agreement with bondholders to restructure and write off its debt.