On February 12, Minister of Finance of Ukraine Sergii Marchenko met with the management of the International Monetary Fund mission to Ukraine.
The IMF mission included Deputy Director of the IMF European Department Uma Ramakrishnan, IMF Mission Chief for Ukraine Gavin Gray, Deputy Mission Chief for Ukraine Sanaa Nadeem and IMF Resident Representative in Ukraine Vahram Stepanyan.
The meeting was also attended by First Deputy Minister of Finance Denys Uliutin, Government Commissioner for Public Debt Management Yuriy Butsa, Deputy Minister of Finance Olga Zykova, Deputy Minister of Finance Roman Yermolychev and Deputy Minister of Finance Svitlana Vorobei.
The topics discussed included issues related to the third review of the four-year Extended Fund Facility (EFF) arrangement and the financing of the budget for 2024.
“I am grateful to the IMF for the cooperation that results in the implementation of effective policies and attraction of funding from the Fund and other donors. The IMF’s expertise allows us to accelerate Ukraine’s economic progress and to be resilient in the face of the current challenges to the financial system. The priorities of our cooperation remain unchanged – Ukraine’s performance of its commitments under the EFF program and the mobilization of funds for the urgent needs of the state budget,” said Sergii Marchenko.
In 2023, the Ministry of Finance of Ukraine attracted $4.5 billion from the IMF under the EFF, out of a total program volume of $15.6 billion. Meanwhile, the program is part of the international support package for Ukraine, which currently amounts to about $122 billion.
In 2024, the EFF program provides $5.4 billion in budgetary assistance to Ukraine.
The next IMF mission in the context of preparations for the third review of the EFF arrangement will start on February 17. The policy discussions will focus on Ukraine’s implementation of the Memorandum of Economic and Financial Policies. Following the successful review, Ukraine will be able to receive the next tranche from the IMF in the amount of about $900 million
During the meeting, the Minister of Finance emphasized that the continued functioning of the cooperation program with the IMF was crucial and Ukraine was responsibly performing the jointly agreed terms of cooperation.
The IMF representatives once again emphasized the commitment of the Ukrainian authorities to the reform agenda, including in the budget, tax and financial areas.
The parties also discussed sources of financing the state budget of Ukraine, including international assistance and the domestic debt market. The parties noted the existing assurances from partners for 2024, including from Japan, the UK and Norway, as well as the crucial decision of the EU leaders to launch the 4-year Ukraine Facility.
Besides attracting external financing, the Ministry of Finance is taking measures to increase domestic resources reducing the State Budget deficit. The capacity development of the Ukrainian financial system is one of the priority areas of cooperation between the Ukrainian authorities and the IMF. The participants of the meeting discussed further measures to stimulate State Budget revenues and the domestic debt market.
“According to the results of 2023, tax and customs revenues of the state budget returned to the pre-war level, and the volume of domestic government bonds issued doubled compared to 2022. Although external financing continues to play an important role at this stage, it is crucial for us to keep creating conditions for the growth of internal budget revenues,” said Sergii Marchenko. (Government portal/Business World Magazine)
