IMF program no longer meets Ukraine's needs, says NBU Governor
Photo: Andriy Pyshnyy (Vitalii Nosach/RBC-Ukraine)
Ukraine, together with the International Monetary Fund (IMF), is shaping the framework and directions of a new loan program, which may replace the current one. The National Bank of Ukraine (NBU) is in the midst of the negotiation process, NBU Governor Andriy Pyshnyy says in an interview with RBC-Ukraine.
In particular, Pyshnyy reminded that the current IMF program is set to conclude in 2027, and a significant part of it has been focused on post-war reconstruction.
Ukraine's funding needs have been calculated under two scenarios. The baseline scenario assumes that the war will continue for a certain period, and under the four-year program, Ukraine will require $153 billion. Under the adverse scenario, the need rises to $165 billion.
"Unfortunately, Russia's actions do not indicate a desire to end the war. Ukraine, its civilian infrastructure, and population are being subjected to increasingly frequent and intense attacks. As a result, the format of the current program no longer fully meets today’s needs," the NBU Governor explained.
Implementation of current program
At the same time, Pyshnyy noted that the current program has been successful both for Ukraine and for the International Monetary Fund itself - eight successful reviews of the program have been conducted so far.
The NBU Governor did not speculate on how recent scandals surrounding the National Anti-Corruption Bureau of Ukraine (NABU) and the State Anti-Corruption Program (SAP), or the government's missed deadlines in appointing the director of the Bureau of Economic Security, might affect future cooperation with the IMF.
"At the moment, there is no reason for us to revise our baseline assumptions in the IMF scenarios. But yes, we must ensure that all obligations undertaken by Ukraine as part of agreements with the European Union and the IMF are fulfilled without exception," Pyshnyy stressed.
New program
The IMF's program with Ukraine for 2023-2027 includes $15.6 billion from the Fund and around $150 billion from international partners.
Prime Minister Yuliia Svyrydenko stated that Ukraine needs a new program. "If the baseline scenario assumes that the war will continue next year, it is quite likely that we will have a new IMF program," Svyrydenko said.
Furthermore, NBU Governor Andriy Pyshnyy reported that negotiations with the IMF are underway to form a certain concept and approach to a new, updated, and extended financing program.
Meanwhile, Svyrydenko has already announced that an IMF mission will visit Ukraine at the end of August.
