IMF mission starts fifth review of Ukraine program as Kyiv reshuffles government
5:28 am Wednesday, September 04th, 2024
KYIV (Reuters) – An International Monetary Fund mission began work on Wednesday on the fifth review of its $15.6 billion lending programme to Ukraine amid a major wartime government reshuffle.
The IMF is a key international lender to Kyiv and its four-year programme is a crucial part of a bigger global economic support package to the country, which is gearing up for a third winter trying to fend off Russia’s full-scale invasion.
Kyiv is spending about 60% of its total budget to fund its army and relies heavily on financial support from its Western partners to pay pensions and wages to public sector employees and finance social and humanitarian spending.
An IMF statement said a Fund monitoring mission had started policy discussions with the Ukrainian authorities.
President Volodymyr Zelenskiy is reshuffling his government to reset the team ahead of the critical autumn and winter months and six ministers tendered their resignation.
Finance Minister Serhiy Marchenko is expected to retain his position, analysts and lawmakers said.
Marchenko has previously said the government faced an uncovered gap of about 500 billion hryvnias ($12 billion) to fund its defence for the rest of the year.
The government plans to raise taxes and has already implemented other measures, including increasing import and excise duties and borrowing more on the domestic market, to raise extra revenue.
Ukraine also won an agreement from bondholders to restructure and write down its debt.
The successful completion of the IMF review would enable Ukraine to secure $1.1 billion in new financing in the coming months, officials have said.
Ukraine has received about $98 billion in financial aid from its Western partners since the start of the war, finance ministry data showed.
(Reporting by Olena Harmash; editing by Philippa Fletcher)
