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Ukraine will receive $2.2 billion in compensation from the International Monetary Fund after successfully meeting the terms of an existing loan program, the IMF said on Friday at the end of a five-day visit to Ukraine.
The much-needed funds still need to be approved by the IMF’s executive board after Ukraine completes the fourth review of its existing four-year IMF loan program, which is worth about $15.4 billion.
The deal is part of a $122 billion international aid package, now in its third year, aimed at helping Ukraine’s economy recover amid Russia’s ongoing aggression in the country.
“Despite the challenges of war, the program’s performance has been strong, with all quantitative performance criteria met, one structural benchmark satisfied and another briefly delayed,” Gavin Gray, the IMF’s Ukraine director, said in a statement.
After suffering a major blow at the beginning of the Russian invasion in 2022, Ukraine’s economy has recovered and is expected to grow by 3.2% this year, while inflation continues to ease, according to recent estimates by the International Monetary Fund.
The IMF staff-level agreement came just over a month after the U.S. Congress passed a shelved foreign aid package that included $61 billion to help Kiev’s forces fight back against Russia.
“After a difficult period of tight liquidity earlier this year due to delays in external financing, external budget support for 2024 has been restored and will continue to be disbursed in a timely manner to help maintain economic stability,” Gray said.
“Fiscal financing needs remain high in 2024,” he continued, adding that the authorities were making progress in restructuring commercial external debt as part of an IMF-backed reform program.
The reforms, he said, were “critical to creating space for high-priority spending and helping return debt to sustainable levels.”
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