IMF Executive Board Completes the Third Review of the Extended Fund Facility Arrangement for Ukraine
IMF News, March 21, 2024
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- IMF Executive Board Completes the Third Review of the Extended Fund Facility Arrangement for Ukraine
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- Published: March 21, 2024
Review completion and immediate financing
- The Executive Board completed the third Review of the extended arrangement under the Extended Fund Facility (EFF) for Ukraine on March 21, 2024.
- The completion enables the authorities to immediately draw US$880 million (SDR 663.9 million), to be channeled for budget support.
- Ukraine’s 48-month EFF arrangement has access of SDR 11.6 billion (equivalent to US$15.6 billion, or about 577 percent of quota) and was approved on March 31, 2023; the arrangement forms part of a US$122 billion support package for Ukraine.
Program performance and compliance
- The authorities met all structural benchmarks through end-February.
- All indicative targets were met.
- All but one quantitative performance criterion for end-December were met; the missed performance criterion related to tax revenues and was missed by a minor amount.
- The Board approved a waiver for non-observance of the December performance criterion on tax revenues.
Macroeconomic outturns and outlook
- The Ukrainian economy showed resilience in 2023 with robust growth outturns, continued sharp disinflation, and maintenance of adequate reserves.
- Outlook for 2024: growth expected to soften to 3-4 percent due to uncertainty about the ongoing war and as supply constraints become more binding.
- The outlook remains subject to exceptionally high downside risks from:
- war-related factors;
- potential shortfalls in external financing;
- socio-economic impacts of policies that may be required if shocks materialize.
Policy priorities and recommendations (from the Managing Director’s statement)
- Ensure timely and predictable disbursement of external financing committed by all donors to safeguard macroeconomic stability.
- Combine external concessional disbursements with strong domestic resource mobilization to meet financing needs and secure fiscal and debt sustainability.
- Strengthen revenue mobilization, underpinned by the recently approved National Revenue Strategy, while avoiding measures that erode the tax base.
- Advance reforms to strengthen frameworks for medium-term budget preparation, fiscal risks and transparency, and public investment management.
- Pursue an external commercial debt treatment in line with program parameters to create space for critical spending and restore debt sustainability.
- Maintain the shift to a managed exchange rate regime and increase exchange rate flexibility to strengthen resilience to external shocks; pursue a gradual easing of FX controls consistent with the National Bank of Ukraine’s strategy to safeguard FX reserves.
- Continue to avoid monetary financing and support further easing in monetary policy as disinflation and FX market stability allow.
- Enhance preparedness for strengthening financial safety nets, supervision, governance, and contingency planning in the financial sector.
- Maintain steadfast reform momentum to enhance anti-corruption and governance frameworks, including ensuring the effectiveness of anticorruption institutions, to contain fiscal risks, enhance growth, and support the path to EU accession.
Selected economic and social indicators (2021–27) — key figures from Table 1
- Nominal GDP (billions of Ukrainian hryvnias): 2021: 5,451; 2022: 5,191; 2023: 6,495; 2024: 7,748; 2025: 8,865; 2026: 9,841; 2027: 10,798.
- Real GDP (percent change): 2021: 3.4; 2022: -29.1; 2023: 5.0; 2024: [3 to 4]; 2025: 6.5; 2026: 4.5.
- Contributions to real GDP (selected):
- Domestic demand: 2021: 12.9; 2022: -23.7; 2023: 8.6; 2024: 3.3.
- Private consumption: 2021: 4.7; 2022: -16.6; 2023: 2.7; 2024: 2.6.
- Investment: 2021: 8.1; 2022: -14.0; 2023: 3.1; 2024: 1.8.
- GDP deflator (percent change): 2021: 24.8; 2022: 34.3; 2023: 19.2; 2024: 15.6; 2025: 7.5; 2026: 5.7.
- Unemployment rate (ILO definition; period average, percent): 2021: 9.8; 2022: 24.5; 2023: 19.1; 2024: 14.5; 2025: 13.8; 2026: 11.6; 2027: 10.4.
- Consumer prices (period average): 2021: 9.4; 2022: 20.2; 2023: 6.4; 2024: 7.6; 2025: 6.2; 2026: 5.2.
- Consumer prices (end of period): 2021: 10.0; 2022: 26.6; 2023: 5.1; 2024: 8.5; 2025: 7.0; 2026: 5.5.
- Nominal wages (average): 2021: 20.8; 2022: 1.0; 2023: 20.1; 2024: 16.9; 2025: 15.9; 2026: 13.3; 2027: 10.5.
- Real wages (average): 2021: -16.0; 2022: 7.8; 2023: 6.7; 2024: (not shown in table).
- Savings (percent of GDP), total and by sector:
- Total: 2021: 12.5; 2022: 17.6; 2023: 10.8; 2024: 11.9; 2025: 13.5; 2026: 16.2.
- Private: 2021: 12.7; 2022: 30.8; 2023: 25.8; 2024: 23.4; 2025: 13.7; 2026: 14.8.
- Public: 2021: -0.2; 2022: -13.2; 2023: -14.9; 2024: -11.5; 2025: -2.9; 2026: 1.4.
- Investment (percent of GDP): 2021: 12.6; 2022: 16.3; 2023: 19.0; 2024: 20.5; 2025: 21.3; (other years shown in table).
- General Government fiscal balance (percent of GDP): 2021: -4.0; 2022: -15.7; 2023: -19.7; 2024: -13.7; 2025: -7.3; 2026: -4.7; 2027: -3.5.
- Fiscal balance, excl. grants (percent of GDP): 2021: -25.0; 2022: -26.3; 2023: -20.2; 2024: -10.3; 2025: -6.0.
- Public and publicly-guaranteed debt (percent of GDP): 2021: 50.5; 2022: 78.4; 2023: 82.9; 2024: 94.0; 2025: 96.7; 2026: 95.9; 2027: 93.8.
- Base money (end of period, percent change): 2021: 11.2; 2022: 19.6; 2023: 23.3; 2024: 18.5; 2025: 15.5; 2026: 9.0.
- Broad money (end of period, percent change): 2021: 12.0; 2022: 23.0; 2023: 18.7; 2024: 10.6.
- Credit to nongovernment (end of period, percent change): 2021: 8.4; 2022: -3.1; 2023: -0.5; 2024: 17.7; 2025: 18.2; 2026: 13.4.
- Current account balance (percent of GDP): 2021: -1.9; 2022: -5.5; 2023: -5.7; 2024: -8.2; 2025: -7.0; 2026: -5.1.
- Gross reserves (end of period, billions of U.S. dollars): 2021: 30.9; 2022: 28.5; 2023: 40.5; 2024: 42.1; 2025: 41.6; 2026: 45.1; 2027: 45.0.
- Months of next year's imports of goods and services: 2021: 3.9; 2022: 5.4.
- Percent of short-term debt (remaining maturity): 2021: 67.5; 2022: 64.5; 2023: 87.3; 2024: 98.7; 2025: 91.0; 2026: 102.5; 2027: 97.8.
- Percent of the IMF composite metric (float): 2021: 98.9; 2022: 92.9; 2023: 113.2; 2024: 104.9; 2025: 98.5; 2026: 100.1; 2027: 97.6.
- External debt (percent of GDP): 2021: 87.4; 2022: 92.5; 2023: 87.9; 2024: 0.0 (table entry).
- Goods exports (annual volume change in percent): 2021: 35.0; 2022: -43.8; 2023: -16.1; 2024: 15.8.
- Goods imports (annual volume change in percent): 2021: 17.0; 2022: -24.7; 2023: 21.1; 2024: 11.0; 2025: 9.2; 2026: 9.3.
- Goods terms of trade (percent change): 2021: -8.4; 2022: -11.6; 2023: 3.6; 2024: -1.0; 2025: 0.7.
- Exchange rate (Hryvnia per U.S. dollar, end of period): 2021: 27.3; 2022: 36.6; 2023: 38.0.
- Exchange rate (Hryvnia per U.S. dollar, period average): 2021: 32.3; 2022: 36.7.
- Real effective rate (deflator-based, percent change): 2021: 10.3; 2022: 27.6.
Memoranda and context
- Per capita GDP / Population (2017): US$2,640 / 44.8 million.
- Literacy / Poverty rate (2022 est): 100 percent / 25 percent.
- Note on coverage: GDP is compiled as per SNA 2008 and excludes territories that are or were in direct combat zones and temporarily occupied by Russia (consistent with the TMU).
- Definitions: The general government includes the central and local governments and the social funds.
Source: Press Release No. 24/96, IMF Communications Department, March 21, 2024.
