The Executive Board of the International Monetary Fund (IMF) today completed the third review of Ukraine’s economic programme under the Extended Fund Facility (EFF). The completion of this review enables the disbursement of SDR 734.05mn (about 1bn dollars), which would bring total disbursements under the arrangement to SDR 6,178.26m (about 8.38bn dollars), the IMF has said in a press release.
Following the Executive Board’s discussion, David Lipton, first deputy managing director and acting chair, said:
"The Ukrainian economy is showing welcome signs of recovery. Growth is returning, inflation has been brought down, and international reserves have doubled. This progress owes much to the authorities' decisive policy actions, including sound macroeconomic policies. The recent stabilization provides a promising basis for further growth.
"To achieve faster, sustainable growth, needed to lift incomes and enable Ukraine to catch up with its regional peers, structural reforms to improve the business environment and attract investment need to be accelerated. A start needs to be made with privatization and developing a market for agricultural land. Corruption needs to be tackled decisively. Despite the creation of new anticorruption institutions, concrete results have yet to be achieved."
The IMF noted that notwithstanding the large fiscal adjustment, public debt remains high.
"Ukraine cannot afford to delay comprehensive pension reform much longer, including by raising the effective retirement age. Sustained efforts are also needed to improve revenue administration and advance public administration reform," the IMF said.
Ukraine’s four-year SDR 12.348bn (about 17.5bn dollars at the time of approval of the arrangement) EFF was approved on 11 March 2015 to support the government's economic programme, which aims to put the economy on the path to recovery, restore external sustainability, strengthen public finances, maintain financial stability, and support economic growth by advancing structural and governance reforms, while protecting the most vulnerable.