A group of Ukraine’s creditor countries (Canada, France, Germany, Japan, the UK and the US) have deferred payments until 2027. By this time, the program of the International Monetary Fund (IMF) for emergency assistance to Ukraine will end.
According to Bloomberg, the provision of financial guarantees includes an extension of the moratorium on the country’s debt repayment until 2027 and additional assistance to “restore debt sustainability” until the end of the IMF program.
In addition, the group of countries strongly urged all other Ukraine’s official creditors to “quickly” agree on “similarly favorable” lending terms. Earlier this week, the IMF agreed to provide Ukraine with a $15.6 billion loan program, the first ever loan to a country where hostilities are ongoing.
Ukraine will receive money from the IMF for four years. The Board of Directors will make a decision in the coming weeks. Ukraine must go through two stages of changes within the framework of the program. First of all:
- refusal of issued financing (printing press);
- strengthening revenue mobilization;
- reforms to strengthen anti-corruption foundations.
The implementation of these conditions will continue for 12-18 months. Then the second stage will come. Then more ambitious reforms are expected. Interestingly, the NBU press release says that already at the second stage Ukraine can become a member of the EU (this decision will be considered by the EU countries regardless of the program with the IMF). In the second stage, the floating exchange rate of the dollar will be returned (now the official exchange rate is fixed by the NBU).
In addition, “competition in the critical energy market and a simultaneous reduction in quasi-fiscal obligations” should appear. Probably, we are talking about the transition to market tariffs for gas and electricity. “International partners believe in Ukraine and are ready to help us. They see the incredible adaptability of our economy after attacks on critical infrastructure,” said NBU Governor Andriy Pyshny.
As GLOBAL HAPPENINGS wrote earlier, the new program should make it possible to overcome Ukraine’s massive budget deficit. In 2023, you can count on 4-5 billion dollars.
Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
