Ukraine has reached a preliminary agreement with the International Monetary Fund (IMF) to receive an aid package valued at 900 million dollars (839.5 million euros) in June, as revealed by the multilateral entity on Monday.

This disbursement, which still needs to be ratified by the IMF management and is part of an aid program for 15,600 million dollars (14,551 million euros), has already been pre-authorized after Kiev committed to improving the tax collection process and the governance, as well as fighting corruption.

Similarly, Ukraine will adopt a “more flexible” foreign exchange rate, reduce controls on foreign currencies and strengthen banking supervision.

“Ukraine’s economy has shown remarkable resilience, while the latest economic data points to a gradual recovery in 2023, although the outlook remains highly uncertain,” the IMF said.

In addition, the agency has highlighted that the country has preserved “macroeconomic and financial stability” thanks to “opportune and continuous external support.” On the negative side, he has warned of the growing public deficit.

Regarding future forecasts, the IMF has revised upwards its forecast for the country’s economic growth to place it in the range between 1% and 3% for this year. Previously, the institution chaired by Christine Lagarde predicted a contraction in GDP of up to 3%.

The IMF approved at the end of March a line of financing for Ukraine of 15,600 million dollars (14,551 million euros) as part of a broader package of international aid of 115,000 million dollars (107,268 million euros) created in response to the Russian invasion.

The objective of that program, with a duration of 48 months, is “to maintain financial and economic stability in times of exceptional uncertainty”, as well as to contribute to the sustainability of the Ukrainian debt. This plan received the backing of the G-7, the European Union and other donors to ensure the viability of the Ukrainian state in the medium term.

In the first part of the program, scheduled for 2023 and 2024, the focus will be on “implementing a robust budget and increasing income”, controlling inflation and the currency exchange rate, and contributing to good long-term financial health. through a deeper analysis of banking entities and ensuring the independence of the central bank.

As for the second phase, this will focus more on structural reforms for macroeconomic stability, post-war reconstruction and strengthening long-term growth prospects. These objectives should be aligned with the milestones required for Ukraine’s accession to the European Union.

“The Russian invasion of Ukraine continues to have a devastating social and economic impact. Activity contracted enormously last year, and a large part of the country’s capital has been destroyed and poverty is on the rise,” lamented the first deputy managing director of the Ukraine. International Monetary Fund, Gita Gopinath.

“Nevertheless, the authorities have generally been successful in safeguarding financial and macroeconomic stability thanks to good policy design and significant external support,” it added.

According to the criteria of The Trust Project