Washington, 3 April 2023 (GNP): The International Monetary Fund (IMF) said on Friday that its executive board has authorized a $15.6 billion loan program for Ukraine over four years as part of a larger $115 billion international aid package to assist the nation in meeting its immediate financial requirements.
The IMF-supported program will help maintain economic and financial stability, catalyze much needed financing from donors and partners (US$ 115 billion), and support Ukraine’s recovery in the post-war period. https://t.co/f53LlVQSD5
— IMF (@IMFNews) March 31, 2023
According to the IMF, the Russian invasion has severely damaged Ukraine’s economy, causing production to decline by around 30% last year, destroying much of its invested capital, and escalating poverty.
“Russia’s invasion of Ukraine continues to have a devastating economic and social impact,” said Gita Gopinath, an IMF official.
Despite this, she continued, Ukrainian authorities “have nevertheless managed to maintain overall macroeconomic and financial stability, thanks to skillful policymaking and substantial external support”.
Of the entire sum the IMF authorized, $2.7 billion is being made immediately accessible to Ukraine, with the remaining funds to be granted over the following four years.
The Board approval of the Ukraine program provides an immediate US$2.7bn, out of the total IMF support of US$15.6bn, part of a financing package of about US$115bn from international partners over the next few years https://t.co/24wJpS1U7I
— Gita Gopinath (@GitaGopinath) March 31, 2023
The Extended Fund Facility loan is the first significant financing package that the IMF has approved for a nation engaged in a prolonged conflict.
The previous $5 billion IMF program for Ukraine ended last year.
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The move formalizes an agreement made at the staff level between the IMF and Ukraine on March 21 that takes into account the country’s route toward EU membership after the war.
Volodymyr Zelensky, the president of Ukraine, appreciated the new funding.
He stated on Twitter that it was a crucial aid in their struggle against Russian aggression. “Together, we support the Ukrainian economy. And we are moving forward to victory!”
https://twitter.com/ZelenskyyUa/status/1641860273387495427?
Further guarantees from a few IMF members have also been included in the plans if the active war goes on above the present prediction of mid-2024.
The IMF anticipated that Ukraine’s financial requirements would climb from $115 bn to about $140 bn if the present war persisted beyond 2025.
