Ukraine has fulfilled all the International Monetary Fund’s (IMF) prior conditions for a new $8.1 billion loan program. The IMF Board of Directors is expected to decide on the program in the coming days. This new agreement will replace the current $15.5 billion arrangement
Reuters reports this.
Details
Ukraine met key prior conditions by submitting a draft Labor Code and approving the national budget, allowing the government to request the new program.
The IMF forecasts Ukraine’s economic growth at below 2% in 2025 due to the ongoing war with Russia. The fund expects the conflict could end in 2026 but also considers a negative scenario extending the war to 2028.
The new program aims to support economic stability and fund state expenditures during the fifth year of the war. Additionally, the World Bank, the Ukrainian government, and the European Union are completing a new assessment of the country’s reconstruction costs. Early estimates suggest the cost will significantly exceed last year’s $524 billion evaluation due to destruction of the energy infrastructure.
Context
Previously, the IMF waived several prior conditions related to VAT for individual entrepreneurs, parcel duties, taxes on digital platforms, and the military levy.
Approval of the new loan program is also tied to Ukraine receiving €90 billion in EU assistance. Ukraine risks losing part of international aid if it fails to meet IMF conditions or comply with the Ukraine Facility.
Earlier, The Ukrainian Review reported that the U.S. and EU are developing a 10-year plan for Ukraine’s post-war economic recovery. The strategic initiative, called the “Prosperity Package,” aims to mobilize $800 billion in public and private investments.
