IMF Ready to Support Ukraine

Most recently the main obstacle to renewing cooperation with the IMF has been that Ukraine allows its population to pay less than full value for utility and transport charges and also has not carried out administrative reform. Some days ago the President of Ukraine has signed a decree on administrative reform. The Constitutional Court has lifted a Verkhovna Rada ban on raising rent and utility rates (incidentally, on March 16 Parliament declared unlawful the Constitutional Court ruling to lift ban on raising rent, utility, and transport charges and proposed it cancel the decision).

As the authorities have said so often, renewed cooperation with the IMF will unblock new World Bank loans. Immediately after a positive IMF Board of Governors decision, Ukraine expects to receive IMF and World Bank loans worth over $350 million. Yet, independent experts note this amount will hardly suffice to meet even essential state requirements. According to the Ukrainian-European Advisory Center, Ukraine has to find $2 billion this year alone to service its foreign debt, including over $1.3 billion in government debt obligations and $600 million in National Bank obligations to the IMF. Experts estimate the state could lack $560 million. As a result, according to specialist in foreign economic relations Oleksiy Plotnykov, it cannot be ruled out that despite IMF loans, Ukraine may have to declare its financial insolvency in the immediate future.