{ "title": "IMF Executive Board Completes the First Review under the Extended Fund Facility (EFF) Arrangement for Ukraine", "publication": "IMF News, June 29, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement", "canonical": "https://www.imf.org/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement", "overlayPath": "/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/index.md", "summary": "The Executive Board of the International Monetary Fund (IMF) completed today the First Review of the Extended Fund Facility (EFF) for Ukraine. The completion of the first review enables the authorities to immediately draw an amount of SDR 663.9 million (33 percent of quota, or about US$890 million).", "publishDate": "2023-06-29", "sections": [ { "heading": "Review completion and immediate disbursement", "content": "- The Executive Board completed the First Review of the EFF for Ukraine.\n- Completion enables the authorities to immediately draw SDR 663.9 million (33 percent of quota, or about US$890 million).\n- The EFF was approved on March 31, 2023, and forms part of a US$115 billion total support package for Ukraine.\n- 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)." }, { "heading": "Program objectives and design", "content": "- Program aims:\n - Anchor policies to sustain fiscal, external, price and financial stability amid exceptionally high uncertainty.\n - Support economic recovery and enhance governance and institutions to promote long-term growth in the context of reconstruction and EU accession.\n- Two-phased approach:\n - Phase 1: Secure macroeconomic stabilization and undertake critical structural reforms while the war is ongoing.\n - Phase 2: Once active combat has subsided sufficiently, entrench macroeconomic policies and embark on a more expansive set of structural reforms to restore medium-term external viability and support sustained growth." }, { "heading": "Recent macroeconomic performance and outlook", "content": "- Despite the war, the economy has shown more resilience than expected after a sharp contraction in 2022.\n- GDP growth upgraded to 1–3 percent in 2023 as domestic demand recovers.\n- Inflation is decelerating, FX reserves are strong, and the FX market is stable.\n- Continued risks: developments in the war, need for timely concessional external financing, and possible policy slippages.\n\nKey performance outcomes under the First Review:\n- Met all continuous and end-April quantitative performance criteria.\n- Met all structural benchmarks through end-June (including enactment of the second Supplementary Budget, strengthening the Budget Code, and completing inputs toward the National Revenue Strategy).\n- Indicative targets on the overall budget balance and social spending were missed due to higher defense spending and methodology changes for social payments.\n- Program external financing gap estimates remain broadly unchanged." }, { "heading": "Fiscal policy and public finances", "content": "- Near-term fiscal focus:\n - Ensure adequate resources for priority spending.\n - Maintain a strong tax revenue base (including by refraining from measures that would erode the tax base).\n - Preserve fiscal and debt sustainability.\n- Priorities:\n - Develop the National Revenue Strategy (NRS) to mobilize revenues for reconstruction and social spending.\n - Restore legal framework for medium-term budget preparation, budget credibility, and debt management.\n - Improve fiscal transparency and strengthen public investment management.\n- Financing strategy:\n - External budget support to continue to constitute the bulk of fiscal financing.\n - Mobilization of domestic financing and elimination of monetary financing remain important.\n - Group of Creditors for Ukraine (GCU) committed to a 2-step process: extend the current debt standstill through the program period and a final debt treatment before the final review.\n - Credible process in place for treatment of external commercial debt; highly concessional financing will remain critical." }, { "heading": "Monetary, exchange rate, and financial sector policies", "content": "- Monetary/exchange rate strategy:\n - Support steady disinflation and exchange rate stability while maintaining adequate FX reserves and prudently managing wartime liquidity surplus.\n - Conditions-based strategy appropriate for moving toward normalization.\n - Once conditions permit: transition from current exchange rate peg toward a flexible exchange rate, cautiously ease emergency FX measures, and return to an inflation targeting framework.\n - Continued evidence of sustained disinflation and FX cash market stability provides scope for earlier easing in monetary policy.\n- Financial sector:\n - Financial system remains stable and liquid due to extensive emergency measures, but risks remain elevated and the true health of banks is partly opaque.\n - Priorities: bank diagnostics, reforms to banking oversight, governance of state-owned banks (SOBs), contingency planning.\n - NBU and other regulators finalizing the next iteration of the financial sector strategy." }, { "heading": "Governance, anti-corruption, and structural reforms", "content": "- Urgent reforms to strengthen governance, transparency, and tackle corruption are required to:\n - Convince foreign investors of a level playing field.\n - Assure donors that resources will be well spent.\n - Support progress toward EU accession.\n- Key legislative measures highlighted:\n - Restoration of asset declarations.\n - Strengthening AML/CFT standards.\n - Strengthening the Specialized Anti-Corruption Prosecutor’s Office (SAPO).\n- Integrated strategy needed for critical spending during recovery and reconstruction, including on energy and procurement." }, { "heading": "Debt treatment and financing assurances", "content": "- Extended arrangement satisfies Fund policies governing financing assurances for UCT-financing under exceptionally high uncertainty.\n- Program designed to achieve objectives across a range of assumptions about the large-scale war and under two scenarios.\n- Credible process for external commercial claims treatment is underway.\n- Adequate financing assurances on debt relief and concessional financing have been received from official bilateral creditors and donors to support debt sustainability in both baseline and downside scenarios.\n- Assurance from a significant group of Fund shareholders about Ukraine’s capacity to repay supports needed safeguards." }, { "heading": "Annex: Selected economic and social indicators (2021–27)", "content": "- Nominal GDP (billions of Ukrainian hryvnias) 1/: 2021: 5,451; 2022: 5,191; 2023: 6,500; 2024: 7,711; 2025: 9,027; 2026: 10,095; 2027: 11,023\n- Real GDP (percent change) 1/: 2021: 3.4; 2022: -29.1; 2023: [ 1 to 3 ]; 2024: 3.2; 2025: 6.5; 2026: 5.0; 2027: 4.0\n- Contributions to Real GDP (selected):\n - Domestic demand: 2021: 12.9; 2022: -23.7; 2023: 6.1; 2024: 2.9; 2025: 5.1; 2026: 3.7; 2027: 2.6\n - Private consumption: 2021: 4.7; 2022: -16.6; 2023: 2.7; 2024: 2.2; 2025: 2.8; 2026: 2.5; 2027: 2.6\n - Public consumption: 2021: 0.1; 2022: 6.9; 2023: 0.7; 2024: -0.5; 2025: -1.8; 2026: -0.6; 2027: -0.2\n - Investment: 2021: 8.1; 2022: -13.9; 2023: 1.2; 2024: 4.2; 2025: 1.4; 2026: 0.3\n - Net exports: 2021: -9.5; 2022: -5.4; 2023: -4.1; 2024: 1.3\n- GDP deflator (percent change): 2021: 24.8; 2022: 34.3; 2023: 22.8; 2024: 15.0; 2025: 9.9\n- Unemployment rate (ILO; period average, percent): 2021: 9.8; 2022: 24.5; 2023: 19.4; 2024: 10.6; 2025: 9.2; 2026: 8.7; 2027: 8.4\n- Consumer prices (period average): 2021: 9.4; 2022: 20.2; 2023: 17.7; 2024: 13.0; 2025: 8.6; 2026: 6.7; 2027: 5.5\n- Consumer prices (end of period): 2021: 10.0; 2022: 26.6; 2023: 15.5; 2024: 7.5; 2025: 6.0\n- Nominal wages (average): 2021: 20.8; 2022: 1.0; 2023: 18.8; 2024: 15.7; 2025: 13.8; 2026: 12.0; 2027: 9.7\n- Real wages (average): 2021: 10.5; 2022: -16.0; 2023: 2.4; 2024: 4.8\n- Savings (percent of GDP): 2021: 12.8; 2022: 17.6; 2023: 9.5; 2024: 11.3; 2025: 13.7; 2026: 17.4\n - Private: 2021: 30.8; 2022: 25.6; 2023: 23.7; 2024: 16.4; 2025: 14.5; 2026: 16.3\n - Public: 2021: -13.2; 2022: -16.1; 2023: -5.1; 2024: -0.8; 2025: 1.1\n- Investment (percent of GDP): 2021: 12.6; 2022: 15.2; 2023: 16.9; 2024: 18.4; 2025: 19.8; 2026: 10.7; 2027: 10.1\n- General Government fiscal balance (percent of GDP) 2/: 2021: -4.0; 2022: -15.7; 2023: -19.1; 2024: -17.8; 2025: -9.6; 2026: -5.3; 2027: -3.8\n- Fiscal balance, excl. grants (percent of GDP) 2/: 2021: -25.0; 2022: -25.8; 2023: -21.1; 2024: -11.6; 2025: -6.4; 2026: -4.9\n- External financing (net, percent of GDP): 2021: 10.8; 2022: 17.1; 2023: 8.2\n- Public and publicly-guaranteed debt (percent of GDP): 2021: 50.5; 2022: 78.5; 2023: 88.1; 2024: 98.6; 2025: 100.7; 2026: 99.5; 2027: 98.4\n- Money and credit (end of period, percent change):\n - Base money: 2021: 11.2; 2022: 19.6; 2023: 30.6; 2024: 9.0; 2025: 7.7\n - Broad money: 2021: 29.7; 2022: 14.2; 2023: 15.1; 2024: 12.1\n - Credit to nongovernment: 2021: -3.1; 2022: 13.3; 2023: 18.1\n- Balance of payments (percent of GDP): Current account balance: 2021: -1.6; 2022: -5.7; 2023: -7.2; 2024: -7.1; 2025: -6.1; 2026: -3.4\n- Gross reserves (end of period, billions of U.S. dollars): 2021: 30.9; 2022: 28.5; 2023: 30.5; 2024: 33.2; 2025: 36.1; 2026: 39.4; 2027: 45.7\n- Months of next year's imports of goods and services: 2021: 4.1; 2022: 4.4; 2023: 5.2\n- Percent of short-term debt (remaining maturity): 2021: 67.5; 2022: 65.2; 2023: 63.2; 2024: 74.5; 2025: 74.9; 2026: 82.3; 2027: 90.5\n- Percent of the IMF composite metric (float): 2021: 98.8; 2022: 91.3; 2023: 78.3; 2024: 80.0; 2025: 81.4; 2026: 91.2\n- Goods terms of trade (percent change): 2021: -8.4; 2022: 0.5; 2023: 1.7\n- Exchange rate:\n - Hryvnia per U.S. dollar (end of period): 2021: 27.3; 2022: 36.6\n - Hryvnia per U.S. dollar (period average): 2021: 32.3\n - Real effective rate (deflator-based, percent change): 2021: 28.2\n- Memorandum items:\n - Per capita GDP / Population (2017): US$2,640 / 44.8 million\n - Literacy / Poverty rate (2022 est 3/): 100 percent / 25 percent\n\nItalic: IMF press release, June 29, 2023.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Ukraine and the IMF\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/index.md)", "[Structured JSON version](/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/index.json)", "[Bundle manifest](/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/bundle-manifest.json)", "Published: June 29, 2023", "The Executive Board completed the First Review of the EFF for Ukraine.", "Completion enables the authorities to immediately draw SDR 663.9 million (33 percent of quota, or about US$890 million).", "The EFF was approved on March 31, 2023, and forms part of a US$115 billion total support package for Ukraine.", "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).", "Program aims:", "Two-phased approach:", "Despite the war, the economy has shown more resilience than expected after a sharp contraction in 2022.", "GDP growth upgraded to 1–3 percent in 2023 as domestic demand recovers.", "Inflation is decelerating, FX reserves are strong, and the FX market is stable.", "Continued risks: developments in the war, need for timely concessional external financing, and possible policy slippages.", "Met all continuous and end-April quantitative performance criteria.", "Met all structural benchmarks through end-June (including enactment of the second Supplementary Budget, strengthening the Budget Code, and completing inputs toward the National Revenue Strategy).", "Indicative targets on the overall budget balance and social spending were missed due to higher defense spending and methodology changes for social payments.", "Program external financing gap estimates remain broadly unchanged.", "Near-term fiscal focus:", "Priorities:", "Financing strategy:", "Monetary/exchange rate strategy:", "Financial sector:", "Urgent reforms to strengthen governance, transparency, and tackle corruption are required to:", "Key legislative measures highlighted:", "Integrated strategy needed for critical spending during recovery and reconstruction, including on energy and procurement.", "Extended arrangement satisfies Fund policies governing financing assurances for UCT-financing under exceptionally high uncertainty.", "Program designed to achieve objectives across a range of assumptions about the large-scale war and under two scenarios.", "Credible process for external commercial claims treatment is underway.", "Adequate financing assurances on debt relief and concessional financing have been received from official bilateral creditors and donors to support debt sustainability in both baseline and downside scenarios.", "Assurance from a significant group of Fund shareholders about Ukraine’s capacity to repay supports needed safeguards.", "Nominal GDP (billions of Ukrainian hryvnias) 1/: 2021: 5,451; 2022: 5,191; 2023: 6,500; 2024: 7,711; 2025: 9,027; 2026: 10,095; 2027: 11,023", "Real GDP (percent change) 1/: 2021: 3.4; 2022: -29.1; 2023: [ 1 to 3 ]; 2024: 3.2; 2025: 6.5; 2026: 5.0; 2027: 4.0", "Contributions to Real GDP (selected):", "GDP deflator (percent change): 2021: 24.8; 2022: 34.3; 2023: 22.8; 2024: 15.0; 2025: 9.9", "Unemployment rate (ILO; period average, percent): 2021: 9.8; 2022: 24.5; 2023: 19.4; 2024: 10.6; 2025: 9.2; 2026: 8.7; 2027: 8.4", "Consumer prices (period average): 2021: 9.4; 2022: 20.2; 2023: 17.7; 2024: 13.0; 2025: 8.6; 2026: 6.7; 2027: 5.5", "Consumer prices (end of period): 2021: 10.0; 2022: 26.6; 2023: 15.5; 2024: 7.5; 2025: 6.0", "Nominal wages (average): 2021: 20.8; 2022: 1.0; 2023: 18.8; 2024: 15.7; 2025: 13.8; 2026: 12.0; 2027: 9.7", "Real wages (average): 2021: 10.5; 2022: -16.0; 2023: 2.4; 2024: 4.8", "Savings (percent of GDP): 2021: 12.8; 2022: 17.6; 2023: 9.5; 2024: 11.3; 2025: 13.7; 2026: 17.4", "Investment (percent of GDP): 2021: 12.6; 2022: 15.2; 2023: 16.9; 2024: 18.4; 2025: 19.8; 2026: 10.7; 2027: 10.1", "General Government fiscal balance (percent of GDP) 2/: 2021: -4.0; 2022: -15.7; 2023: -19.1; 2024: -17.8; 2025: -9.6; 2026: -5.3; 2027: -3.8", "Fiscal balance, excl. grants (percent of GDP) 2/: 2021: -25.0; 2022: -25.8; 2023: -21.1; 2024: -11.6; 2025: -6.4; 2026: -4.9", "External financing (net, percent of GDP): 2021: 10.8; 2022: 17.1; 2023: 8.2", "Public and publicly-guaranteed debt (percent of GDP): 2021: 50.5; 2022: 78.5; 2023: 88.1; 2024: 98.6; 2025: 100.7; 2026: 99.5; 2027: 98.4", "Money and credit (end of period, percent change):", "Balance of payments (percent of GDP): Current account balance: 2021: -1.6; 2022: -5.7; 2023: -7.2; 2024: -7.1; 2025: -6.1; 2026: -3.4", "Gross reserves (end of period, billions of U.S. dollars): 2021: 30.9; 2022: 28.5; 2023: 30.5; 2024: 33.2; 2025: 36.1; 2026: 39.4; 2027: 45.7", "Months of next year's imports of goods and services: 2021: 4.1; 2022: 4.4; 2023: 5.2", "Percent of short-term debt (remaining maturity): 2021: 67.5; 2022: 65.2; 2023: 63.2; 2024: 74.5; 2025: 74.9; 2026: 82.3; 2027: 90.5", "Percent of the IMF composite metric (float): 2021: 98.8; 2022: 91.3; 2023: 78.3; 2024: 80.0; 2025: 81.4; 2026: 91.2", "Goods terms of trade (percent change): 2021: -8.4; 2022: 0.5; 2023: 1.7", "Exchange rate:", "Memorandum items:", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Ukraine and the IMF](http://www.imf.org/external/country/UKR/index.htm)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/index.md", "json": "/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/index.json", "bundleManifest": "/en/news/articles/2023/06/29/pr23249-ukraine-imf-exec-board-completes-1st-rev-eff-arrangement/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:14:05.693Z" }