The International Monetary Fund (IMF) has reached a preliminary agreement with Ukraine to provide Kyiv with about $1.1 billion in financial assistance, the IMF announced on Sept. 10.
The IMF team led by Gavin Gray held week-long negotiations with the Ukrainian authorities in Kyiv on the fifth review of the country's four-year Extended Fund Facility (EFF) program.
The EFF is a long-term funding agreement that will allow Ukraine to access $15.6 billion in financial aid in regular installments.
The two parties reached a staff-level agreement. If approved by the IMF Executive Board, which is expected to happen in "coming weeks," Ukraine will have access to about $1.1 billion.
"Program performance remains strong. The authorities met all end-June quantitative performance criteria (QPCs) and the structural benchmark for the review," the statement read.
According to Prime Minister Denys Shmyhal, the agreements show that Ukraine "is continuing important reforms, and international partners support us on this path."
At the same time, the IMF said that the risks to Ukraine "remain exceptionally high" with the expected economic slowdown due to repeated Russian attacks on the country's energy infrastructure and the impact of the war on labor markets and confidence.
The IMF said Kyiv needs to "respect financing constraints and debt sustainability objectives" in the 2025 budget.
"Tax revenues need to increase in 2025 and beyond to create space for critical spending, to preserve essential buffers, and restore fiscal sustainability," the statement read.
Despite inflows of foreign financial aid, Shmyhal said in August that Ukraine's budget deficit for 2025 is projected to be $35 billion — roughly $20 billion of which will be covered by the EU's Ukraine Facility program and by assistance from the IMF.
Maxwell Kushnir
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