IMF Approves 1.5 Billion USD Disbursement for Ukraine

The Executive Board of the International Monetary Fund completed its first overview of the economic performance of Ukraine under the Stand-By Arrangement. Positive results of the review lead to an immediate appropriation of a tranche, worth 1.5 billion USD.

"The authorities remain committed to timely implementation of fiscal, energy, and financial sector reforms that are essential to achieve program objectives", stated John Lipsky, First Deputy Managing Director and Acting Chair of the International Monetary Fund (IMF).

IMF resumed its cooperation with Ukraine in July, 2010. At that time the disbursement of total 15.3 billion USD was approved. The disbursement was aimed at support of the economic adjustments and reform program in Ukraine. Ukraine received the first tranche in August, 2010. In order to be entitled to the disbursement, Ukrainian leadership has adopted the new Tax code, and working on introducing the pension reform adopting the state budget with deficit below 3% of the GDP. The substantial part of the second tranche is meant to cover the budget deficit.

In December, 2010, the Ukrainian parliament adopted a draft Memorandum to be sent to the IMF. The provisions of the document have not been made public yet.

In his official statement on the IMF's web-site, John Lipsky underlined that "longer term fiscal sustainability depends crucially on structural reforms in the areas of pension, public administration, and state-owned enterprises. In this regard, the timely approval and implementation of the pension reform legislation submitted to parliament will be key".

Acting Chair of the IMF praised Ukraine's recent steps to strengthen the financial position of Naftogaz, state gas and oil monopoly, on a way to making the county's energy sector more transparent.

Recently, Ukraine undertook a number of steps aimed at reforming the country to meet the European standards, namely adopting the new Tax code, adopting a draft law on pension reform, adopting a draft law on anticorruption measures, launching administrative reform by optimizing the executive branch of the state.