IMF approves US$15.6 billion support package for Ukraine’s economic recovery

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1st April 2023 – (Kyiv) The International Monetary Fund (IMF) has granted Ukraine a $15.6 billion support package to help with its economic recovery, following the devastating impact of Russia’s invasion. The conflict caused Ukraine’s economy to contract by approximately 30% last year, leading to poverty and destruction of capital stock. The IMF’s support package is part of a larger $115 billion overall support package that includes debt relief, grants, and loans from multilateral and bilateral institutions. The two-step program aims to stabilise the country’s economy while the war continues before moving towards more significant structural reforms once hostilities cease.

The IMF’s board has approved a 48-month Extended Fund Facility worth approximately $15.6 billion for Ukraine’s economic recovery. The package aims to sustain macroeconomic and financial stability, support economic recovery, and provide an anchor for economic policies. The program includes additional guarantees from some IMF members in the event that active combat continues beyond mid-2024. Of the total amount approved, $2.7 billion is being made available immediately, with the rest of the funds due to be released over the next four years.

The devastating impact of Russia’s invasion has rippled through the global economy, leading to rising wheat and oil prices, which have fueled global inflation. The war has also highlighted Europe’s dependence on Russian natural gas for its energy security. As a result, many countries have sought alternative sources of energy since the conflict began.

The IMF’s support package aims to stabilize Ukraine’s economic situation while the conflict continues before moving towards more significant structural reforms after hostilities cease. The program has been designed to work even if economic circumstances are worse than the current baseline. The package will provide an anchor for economic policies that will support economic recovery and sustain macroeconomic and financial stability.

The IMF’s support is part of a larger $115 billion overall support package that includes debt relief, grants, and loans from multilateral and bilateral institutions. Ukraine’s new IMF-supported program aims to provide an anchor for economic policies that will support economic recovery and sustain macroeconomic and financial stability. The program will also include additional guarantees from some IMF members in the event that active combat continues beyond its current estimate of mid-2024.

If the conflict extends into 2025, Ukraine’s financial needs could increase from $115 billion to around $140 billion. The IMF’s support package has been designed to work even if economic circumstances are worse than the current baseline. The program will provide an anchor for economic policies that will support economic recovery and sustain macroeconomic and financial stability.