Key facts
- IMF staff and Ukraine reached an agreement on the first review of the Extended Fund Facility program.
- The deal could lead to a $690 million disbursement, bringing total funding to $2.2 billion.
- Ukraine met its quantitative targets but lagged on some structural reforms.
- The IMF noted Ukraine's macroeconomic stability despite the war, supported by international aid.
- Risks remain high, with projected slower economic growth in 2026.
- The IMF urged further fiscal discipline, revenue reforms, and anti-corruption efforts.
The International Monetary Fund (IMF) announced on June 12 that its staff has reached an agreement with Ukraine on the first review of the country's four-year Extended Fund Facility (EFF) program. This preliminary deal, if approved by the IMF's Executive Board, would allow for a disbursement of approximately $690 million, bringing the total funding provided under the program to around $2.2 billion.
IMF mission chief Gavin Gray stated that Ukraine met all quantitative performance criteria and indicative targets through the end of March. However, progress on some structural reforms has been slower than planned, with two benchmarks implemented late and one missed entirely. The IMF and Ukrainian officials have agreed on a revised timetable for reforms, along with corrective measures and additional policy commitments to ensure the program stays on track.
The fund acknowledged that Ukraine has maintained macroeconomic stability despite Russia's ongoing war, supported by international assistance and domestic policies. The National Bank of Ukraine has been effective in preserving financial stability, maintaining adequate reserves, and controlling inflation expectations.
Despite these efforts, the IMF cautioned that significant risks persist. Ukraine's economic growth is anticipated to slow to between 1% and 1.6% in 2026, influenced by the war's continued impact and broader geopolitical disruptions. The IMF stressed the importance of sustained fiscal discipline and reforms aimed at boosting state revenues. Proposed measures include eliminating VAT exemptions on imported parcels, enhancing enforcement against tax evasion, reforming the simplified tax system, and reducing the informal economy's size.
Additionally, the IMF called for intensified anti-corruption efforts, improved governance of state-owned enterprises, and gradual reforms in the energy sector, including a roadmap for market liberalization and future adjustments to household utility tariffs. This agreement follows recent legislative actions by Ukraine's parliament, including bills on digital platform taxation and extended military taxes, which are tied to IMF and EU commitments, as well as a World Bank loan.