IMF approves $400 million for Ukraine’s economic stability and recovery

The International Monetary Fund (IMF) Executive Board approved a $400 million disbursement to Ukraine on March 28, as part of the Extended Fund Facility (EFF).

This payment is the latest installment in a four-year program aimed at providing Ukraine with a total of $15.6 billion in budget support. With this new funding, the IMF has now allocated $10.1 billion to Ukraine, Caliber.Az reports, citing Ukrainian media.

The approval follows the IMF's completion of the seventh review of the EFF agreement. IMF Managing Director Kristalina Georgieva stated that Russia's ongoing war in Ukraine continues to have a severe social and economic impact, although Ukraine’s economy has shown resilience. However, the IMF anticipates a slowdown in growth in 2025, driven by challenges such as energy needs and a tight labor market. Georgieva emphasized the importance of contingency planning to address potential risks.

On Ukraine's monetary policy, Georgieva urged the National Bank of Ukraine to remain ready to take further action if inflation expectations worsen. In response to rising inflation, the central bank recently increased its key policy rate from 14.5% to 15.5%. Inflation in Ukraine surpassed expectations in 2024, reaching 12%.

The funds from the EFF are crucial for stabilizing Ukraine's economy, aiding in postwar recovery, and supporting the country’s economic growth as it works toward EU membership. External financial assistance remains vital for Ukraine as it faces mounting pressures from Russia's invasion. Last year, Ukraine received $42.5 billion in foreign aid, and the Finance Ministry has projected a need for at least $12 billion more in 2025.

By Khagan Isayev