Press Release No. 05/186

Press Release: Statement by IMF Managing Director Rodrigo de Rato at the Conclusion of his Visit to Ukraine

August 5, 2005

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of his visit to Kiev:

"First of all, I would like to thank President Yuschenko for inviting me to my first visit to Ukraine. I would also like to thank President Yuschenko, Prime Minister Tymoshenko, and Governor Stelmakh for a productive and constructive dialogue on Ukraine's economy performance and prospects.

"We agreed that the immediate challenge for the government is to lower inflation while helping to re-launch sustained growth. In my view, this requires, in the first place, a coordinated and well-communicated macroeconomic strategy on how to achieve these objectives.

"The building blocks of this strategy are (1) a prudent fiscal stance in 2005 and 2006; (2) tighter monetary conditions, including by adopting a monetary framework that allows the National Bank of Ukraine (NBU) to control inflation more effectively; and (3) an improvement of the investment climate.

"Looking beyond this and next year, the main challenge will be to develop market-friendly institutions that could support economic growth and enhance the role of the private sector. Further integration into the world economy provides for a clear framework in which this longer-term strategy could be implemented.

"With the right policies in place, I am confident that the outlook can quickly improve and remain favorable for years to come. We at the IMF stand ready to assist the authorities in any way they find appropriate."