IMF set to run frequent reviews of EFF for Ukraine

The International Monetary Fund has scheduled frequent reviews of the Enhanced Financing Program for Ukraine (EFF): one in the summer and one in the fall.

This was stated by the Permanent Representative of the International Monetary Fund (IMF) in Ukraine, Vagram Stepanyan, who spoke in an interview with Interfax-Ukraine, Ukrinform reports.

"The Fund's programs are evaluated through regular reviews involving IMF experts who update their macroeconomic outlooks and baselines based on analysis of recent data and developments, as well as policy discussions with the authorities. In this case, we have scheduled frequent reviews: one in the summer and one in the fall ", he said.

Stepanyan noted that the EFF was designed to address the problem of Ukraine's balance of payments and restore medium-term external viability under both the baseline and pessimistic scenarios. That is why financial guarantees to support debt sustainability are also provided for the baseline and pessimistic scenarios. These requirements are in line with the Fund's lending policy in conditions of exceptionally high uncertainty.

The IMF representative added that the Fund laid down two scenarios for the development of Ukraine's economy: optimistic and pessimistic. At the same time, a detailed discussion of the pessimistic scenario of developments is a mandatory feature of the EFF.

"As for the optimistic scenario, we recognize in our assessment of the situation that Ukraine's economic prospects may be more favorable than expected, subject to a faster cessation of hostilities. To illustrate this optimistic risk, we discuss a scenario that involves more pronounced recovery efforts and a more powerful reform implementation program. And, of course, we all hope for better economic prospects," Stepanyan explained.

He noted that under the EFF, the Ukrainian authorities undertook to protect and pursue reforms to strengthen governance and anti-corruption program, including by introducing legislative changes. This area is an important part of the Facility.

According to Stepanyan, about a third of the program's measures are directly related to governance and/or the fight against corruption. Examples include the targeted reinstatement of mandatory asset declarations and work on legislation to tackle money laundering and financing of terrorism.

In addition, many measures in the budget and financial sectors also relate to transparency and governance, including increasing transparency in reporting and risk management in public finance, strengthening public investment management, improving revenue administration, and strengthening governance of state-owned enterprises and the financial sector.

As reported, in March 2023 the IMF Executive Board approved a new four-year Extended Fund Facility for Ukraine in the amount of $15.6 billion. Ukraine received the first tranche of $2.7 billion immediately after the EFF was approved.