{ "title": "IMF and Ukrainian Authorities Reach Staff Level Agreement on the Sixth Review of the Extended Fund Facility (EFF) Arrangement", "publication": "IMF News, November 19, 2024", "sourceUrl": "https://www.imf.org/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla", "canonical": "https://www.imf.org/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla", "overlayPath": "/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/index.md", "summary": "IMF and Ukrainian Authorities Reach Staff Level Agreement on the Sixth Review of the Extended Fund Facility (EFF) Arrangement", "publishDate": "2024-11-19", "sections": [ { "heading": "Staff-Level Agreement and Disbursement", "content": "- IMF staff and the Ukrainian authorities have reached staff level agreement (SLA) on the Sixth Review of the 4-year Extended Fund Facility (EFF) Arrangement.\n- Subject to approval by the IMF Executive Board, Ukraine would have access to about US$1.1 billion (SDR 834.9 million), bringing total disbursements under the program to US$9.8 billion.\n- Board consideration is expected in the coming weeks." }, { "heading": "Program Performance and Macroeconomic Outlook", "content": "- Program performance remains strong; the authorities met all end-September quantitative performance criteria (QPCs) and the structural benchmarks for the review.\n- The outlook is exceptionally uncertain due to Russia's war in Ukraine and continued attacks on energy infrastructure.\n- Key macroeconomic projections and indicators:\n - Real GDP growth is expected at 4 percent in 2024.\n - Slowdown to 2.5-3.5 percent is forecast for 2025.\n - Inflation reached 9.7 percent y/y in October.\n - Gross international reserves amounted to US$36.6 billion at end-October 2024.\n- External support noted:\n - Continued large external official support.\n - The G7's ERA Initiative is expected to provide US$50 billion in financing to Ukraine." }, { "heading": "Fiscal Policy, Budgets, and Debt Sustainability", "content": "- The 2024 supplementary and 2025 budgets are in line with program parameters.\n- The 2025 budget deficit is expected to reach 19 percent of GDP, reflecting continued spending needs due to the ongoing war.\n- The 2025 budget incorporates the package of tax measures approved by the Rada, with an expected yield on the order of 1.6 percent of GDP in 2025.\n - Enactment of the tax package is a requirement for the review.\n- Financing the 2025 deficit will require significant external support, notably finalization of the G7 ERA Initiative.\n- Policy recommendations to preserve fiscal stability and restore sustainability:\n - Be ready to respond to fiscal shocks with offsetting measures, particularly broad-based, durable, and efficient revenue measures, such as an increase in the main VAT rate.\n - Mobilize domestic revenues through implementation of the National Revenue Strategy (NRS), including reducing tax evasion and increasing compliance.\n- Debt sustainability depends on:\n - Revenue-based fiscal adjustment under the program.\n - External financing on concessional terms.\n - Implementation of the authorities’ debt restructuring strategy.\n - Completing treatment of remaining external commercial claims, including the GDP warrants, in line with the program’s debt sustainability objectives." }, { "heading": "Structural Reforms and Governance", "content": "- Priority reforms and institutional actions:\n - Accelerate reforms to the state customs service and the Economic Security Bureau (ESBU), including appointment of new heads as planned.\n - Enhance independence, competence, and credibility of anti-corruption and judicial institutions.\n - Recent parliamentary adoption of the law reforming the Accounting Chamber of Ukraine noted as a welcome step.\n - Strengthen the criminal procedural code and establish a new high administrative court as key near-term priorities.\n - Timely completion and publication of the inaugural external audit report of the National Anti-corruption Bureau of Ukraine (NABU).\n - The full supervisory board of Ukrenergo is expected to be restored in early December.\n - Independent evaluations of the supervisory boards of key energy SOEs to be undertaken in the first quarter of 2025." }, { "heading": "Monetary Policy and Exchange Rate Framework", "content": "- Monetary policy stance:\n - Given upside risks to inflation, the pause in the easing cycle remains appropriate.\n - Further action could be warranted should inflation accelerate or inflation expectations deteriorate.\n - The scope for easing could resume as inflationary pressures unwind.\n- Exchange rate and FX policy:\n - The exchange rate should continue to act as a shock absorber and adjust to market fundamentals while ensuring adequate reserves are maintained.\n - A judicious and staged approach to FX liberalization should continue in line with the National Bank of Ukraine’s strategy, supported by continued close monitoring." }, { "heading": "Financial Sector and Stability", "content": "- The financial sector is described as stable and liquid, with reforms continuing despite challenges under Martial Law.\n- Priorities to preserve financial stability and enhance preparedness:\n - Strengthen the bank rehabilitation framework.\n - Advance contingency planning.\n - Enhance risk-based supervision." }, { "heading": "Mission, Process, and Stakeholder Engagement", "content": "- An IMF team led by Mr. Gavin Gray held discussions in Kyiv during November 11-18, 2024.\n- The mission met with Prime Minister Shmyhal, Finance Minister Marchenko, National Bank of Ukraine Governor Pyshnyy, other government ministers, public officials, and civil society.\n- The mission thanked them and their technical staff for excellent collaboration and constructive discussions.\n- Context note: Russia’s war in Ukraine has lasted 1,000 days as referenced in the statement.\n\nPress Release No. PR24/425, November 19, 2024, IMF Communications Department.\n\n---\n\n\n References\n\n- Ukraine and the IMF\n- The IMF and Good Governance -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Ukraine’s four-year EFF Arrangement with the IMF\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla" } ], "bullets": [ "[Markdown version](/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/index.md)", "[Structured JSON version](/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/index.json)", "[Bundle manifest](/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/bundle-manifest.json)", "Published: November 19, 2024", "IMF staff and the Ukrainian authorities have reached staff level agreement (SLA) on the Sixth Review of the 4-year Extended Fund Facility (EFF) Arrangement.", "Subject to approval by the IMF Executive Board, Ukraine would have access to about US$1.1 billion (SDR 834.9 million), bringing total disbursements under the program to US$9.8 billion.", "Board consideration is expected in the coming weeks.", "Program performance remains strong; the authorities met all end-September quantitative performance criteria (QPCs) and the structural benchmarks for the review.", "The outlook is exceptionally uncertain due to Russia's war in Ukraine and continued attacks on energy infrastructure.", "Key macroeconomic projections and indicators:", "External support noted:", "The 2024 supplementary and 2025 budgets are in line with program parameters.", "The 2025 budget deficit is expected to reach 19 percent of GDP, reflecting continued spending needs due to the ongoing war.", "The 2025 budget incorporates the package of tax measures approved by the Rada, with an expected yield on the order of 1.6 percent of GDP in 2025.", "Financing the 2025 deficit will require significant external support, notably finalization of the G7 ERA Initiative.", "Policy recommendations to preserve fiscal stability and restore sustainability:", "Debt sustainability depends on:", "Priority reforms and institutional actions:", "Monetary policy stance:", "Exchange rate and FX policy:", "The financial sector is described as stable and liquid, with reforms continuing despite challenges under Martial Law.", "Priorities to preserve financial stability and enhance preparedness:", "An IMF team led by Mr. Gavin Gray held discussions in Kyiv during November 11-18, 2024.", "The mission met with Prime Minister Shmyhal, Finance Minister Marchenko, National Bank of Ukraine Governor Pyshnyy, other government ministers, public officials, and civil society.", "The mission thanked them and their technical staff for excellent collaboration and constructive discussions.", "Context note: Russia’s war in Ukraine has lasted 1,000 days as referenced in the statement.", "[Ukraine and the IMF](http://www.imf.org/external/country/UKR/index.htm)", "[The IMF and Good Governance -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/the-imf-and-good-governance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[Ukraine’s four-year EFF Arrangement with the IMF](https://www.imf.org/en/Publications/CR/Issues/2023/03/31/Ukraine-Request-for-an-Extended-Arrangement-Under-the-Extended-Fund-Facility-and-Review-of-531687)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/index.md", "json": "/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/index.json", "bundleManifest": "/en/news/articles/2024/11/19/pr24425-ukraine-6th-review-sla/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T03:26:43.730Z" }