Washington, United States–The IMF said Friday it has reached a staff-level agreement with Ukrainian authorities that opens doors to a full-fledged loan, which would also support the country’s bid to join the European Union.
Ukraine was seen to have “strong” performance under a four-month program with the International Monetary Fund, meeting its targets and benchmarks, said Gavin Gray, who led the IMF mission.
The government submitted a package of draft tax laws to Parliament aimed at lifting revenues, and is taking steps to address arrears, among other efforts.
“A fully-fledged IMF program would be supportive of the Ukrainian government’s efforts toward EU accession,” Gray said in a statement.
He added that authorities are “making progress in reforms to strengthen governance, anti-corruption and rule of law, and lay the foundations for post-war growth.”
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But the agenda of reforms remains significant.
Ukraine’s economy contracted by 30 percent last year, less severely than anticipated, but recovery and reconstruction has been estimated at hundreds of billions of dollars.
“The public sector will play an important role in the reconstruction process,” said Gray.
He added that measures to raise the “efficiency and transparency of public finances and governance will be critical.”
Russia’s invasion of Ukraine around a year ago has displaced millions of people, and global food and energy prices surged on the fallout from the war.
Apart from the IMF’s work with Ukraine, the World Bank has also mobilized over $18 billion in emergency financing for the country, with more than $16 billion since disbursed through projects.