Press Release No. 05/186

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."