The International Monetary Fund estimates that the war in Ukraine will end by the end of the year.
The Executive Board of the International Monetary Fund (IMF) confirmed on Thursday that it will grant Ukraine an 880 million dollar loan in the third phase of a financing program worth a total of 15.6 billion dollars. It supports the country’s war-torn economy. The new decision brings the total amount of the loan disbursed to Ukraine so far to 5.4 billion dollars.
– Russia’s attack on Ukraine continues to bring enormous social and economic costs to Ukraine, IMF CEO Kristalina Georgieva said in a statement confirming the decision.
– However, macroeconomic and financial stability in the country has been preserved, which reflects the skillful decision-making of the Ukrainian authorities and significant external support, he added.
The board’s approval came about a month after IMF representatives visited Ukraine and concluded that the country’s authorities had met most of the criteria for releasing the loan money.
More than two years after the start of the Russian invasion, Ukraine’s major cities are still under almost daily aerial bombardment, and the ground war continues in the eastern part of the country. Despite this, according to the IMF, Ukraine’s economy proved to be more resilient than expected in 2023 with strong growth, sharply declining inflation and maintaining sufficient reserves.
However, headwinds are in store this year, with growth expected to slow to 3-4 percent due to war-related uncertainty and shrinking supply, it added.
According to the global lender, risks in Ukraine remain exceptionally high due to the uncertainty caused by the Russian invasion and external funding. Head of the IMF’s Ukraine mission Gavin Gray said the fund still expects the war in Ukraine to end by the end of this year.
According to Gray, Ukraine should receive the loan money in the next few days.
The IMF’s loan decision brings relief to Ukraine’s economic situation, as the US Congress continues to argue about approving an additional $61 billion aid package for Ukraine. Gray said the IMF needs to study the impact of US decisions on Ukraine’s debt level, should US lawmakers decide to turn some of the funding into a loan instead of a grant.
The IMF has recently estimated the cost of Ukraine’s post-war reconstruction at nearly $490 billion.
Sources: AFP, Reuters