IMF to launch new Ukraine mission to review loan, latest economic developments

By Thomson Reuters May 16, 2024 | 1:10 PM

By David Lawder

WASHINGTON (Reuters) – The International Monetary Fund will start a new Ukraine mission in coming weeks to assess the war-torn country’s $15.6 billion loan program and latest economic developments there amid stepped up Russian military pressure, IMF spokesperson Julie Kozack said on Thursday.

The loan review mission also will revise the IMF’s analysis of Ukraine’s debt sustainability, Kozack said. That assessment will influence the country’s efforts to restructure $20 billion of debt with bondholders before a payment freeze expires at the end of August.

In March, the IMF executive board approved the third review of Ukraine’s Extended Fund Facility loan program, resulting in an $880 million disbursement.

Kozack said the IMF hoped that an agreement on the fourth review could be brought up for board approval by the end of June. The IMF typically bases disbursement amounts on program reviews and performance towards reform goals.

“The Ukrainian economy has shown remarkable resilience. Although the Outlook does remain subject to exceptionally high war-related uncertainty,” she said. “The authorities have made good progress for their EFF commitments under very challenging conditions.”

But since the last review, Russia has stepped up its missile attacks on Ukrainian power infrastructure, forcing it to import record amounts of electricity. Russian forces have also opened up a new front in the northeast close to Ukraine’s second largest city, Kharkiv.

The U.S. Congress has also approved a long-delayed $61 billion military and economic aid package for Ukraine. The IMF has previously estimated that Ukraine will need about $42 billion in external budgetary support this year.

Asked about deliberations by Western industrial democracies to harness the income from frozen sovereign Russian assets to aid Ukraine, Kozack said the IMF’s position has not changed: that this was a matter for relevant jurisdictions and courts to decide.

“What is important for the Fund — for us — is that any action that is taken has sufficient legal underpinnings and does not undermine the functioning of the international monetary system,” Kozack added.

(Reporting by David Lawder; Editing by Franklin Paul and Frances Kerry)