UKRAINE: On Tuesday, the Washington-based lender announced that it had struck a staff-level agreement with the Kyiv administration on a comprehensive financing arrangement that would last four years. Within the next several weeks, the agreement is anticipated to be completed with the board’s blessing from the IMF.
“Russia’s invasion of Ukraine continues to have a devastating impact on the economy: activity has contracted by 30 percent in 2022, a large share of the capital stock has been destroyed, and poverty levels have climbed,” Gavin Gray, an IMF official, stated in a statement.
Two phases of the program will be implemented. In the initial phase, which will span 12 to 18 months, Ukraine will implement policies to “strengthen fiscal, external, price, and financial stability,” including stopping monetary funding.
In the second stage, bigger changes are made to keep the macroeconomy stable, help the country recover, and rebuild, especially since Ukraine wants to join the European Union. The Ukrainian economy is expected to drop by 3% to grow by 1% this year, according to IMF staff predictions, following a 30% decline in 2022.
In addition to training, logistical, and intelligence support, military aid, which makes up more than half of US spending on Ukraine, covers the cost of drones, tanks, missiles, and other ordnance systems.
Since Russia invaded Ukraine in February of last year, money has continued to flow from all around the world.
The IMF announced last week that its executive board had agreed to a guideline modification to permit assistance for nations experiencing “exceptionally significant uncertainty.”
It said that the measure was for countries dealing with “exogenous shocks that are beyond the control of country authorities and the scope of their economic plans,” but it didn’t name Ukraine.
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