Somali Magazine – The International Monetary Fund (IMF) on Monday started official policy talks with Ukrainian officials on the $15.6 billion Extended Fund Facility (EFF) loan.
In March 2023, the IMF Board approved a new 48-month extended arrangement under the Extended Fund Facility (EFF) of SDR 11.6 billion (about US$15.6 billion) as part of a US$115 billion total support package for Ukraine.
The approval of the EFF is expected to mobilize large-scale concessional financing from Ukraine’s international donors and partners to help resolve Ukraine’s balance of payments problem, attain medium-term external viability, and restore debt sustainability on a forward-looking basis in both a baseline and downside scenario.
“We are committed to a constructive analysis of the completed work and fruitful discussion on the next steps. The review will not be easy, but Ukraine’s team has been working smoothly and effectively for over 20 months of the large-scale war,” said Ukraine’s central bank governor Andriy Pyshnyi in a statement.
Andriy Pyshnyi added that “we clearly understand the critical need to maintain the IMF’s support not only for further budget needs financing but for the country’s development and its European future.”
Russia’s invasion of Ukraine has continued to have an economic and social impact. This has caused Ukraine to heavily depend on international aid to cover its budget gap and finance social and humanitarian spending.
Speaking to one of the newswires (Reuters), Finance Minister Serhiy Marchenko said that Ukraine is struggling to secure financial support considering that the world’s major focus is on the geopolitical dynamics that shake the global market.
Serhiy Marchenko further said that the Ukraine government plans to lower the budget deficit for 2024 from its standing target and better forecast the economic growth of the country as businesses scale up in the middle of the intensified war.
According to the finance ministry data, Ukraine has so far this year received $35.4 billion from partners to cover its budget gap. Last year, Ukraine got $31 billion, finance ministry data showed.
Despite the aid, Ukraine still runs a financial deficit of $41 billion, looking forward to international aid to cover the gap. The Ukrainian legislature is due to vote for the 2024 draft budget in the second reading this week, while Kyiv, on the same note, expects an EU assessment on how far it has advanced in fulfilling economic and legal criteria to clear the way for accession talks.