The IMF explained its decision to allocate Ukraine $ 1 billion
The International monetary Fund believes that the Ukrainian economy began to grow again, and the government of Ukraine is pursuing a balanced macroeconomic policy. But Ukraine needs to implement reforms to improve the business environment and attract investment.
This was stated by first Deputy managing Director and acting Chairman of IMF, David Lipton, commenting on the decision of the Fund to allocate to Ukraine of $ 1 billion.
“The Ukrainian economy is showing signs of recovery. Growth is recovering, inflation is reduced and international reserves have doubled. This progress is largely thanks to the decisive actions of the authorities, including prudent macroeconomic policies. The recent stabilization provides a promising basis for further growth,” he said.
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However, Lipton noted that to achieve faster and more sustainable growth which would allow to catch up with its regional neighbors, have accelerated the implementation of structural reforms to improve the business environment and attract investment.
“The beginning should be privatized and market development of agricultural lands. The fight against corruption needs to be more decisive. Despite the creation of new institutions to combat corruption, concrete results have not yet been reached,” – said the acting head of the IMF.
David Lipton drew attention to the high level of government debt. He stated the urgency of structural fiscal reforms to ensure medium-term sustainability.
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“Ukraine can no longer afford to delay comprehensive pension reform, which would include, in particular, raising the retirement age. In addition, continuous efforts are needed to improve revenue administration and promote reform of state governance”, – said the IMF representative.
Lipton praised the monetary policy of the National Bank of Ukraine and drew attention to the importance of preserving the independence of the NBU.
“Impressive progress has been made in restoring the banking system, but we need to continue efforts to restore stability of banks and strengthening their ability to support growth. The recent nationalization of Ukraine’s largest Bank was an important step to ensure financial stability, but now it needs to be supported by efforts to ensure repayment of loans to minimise costs for taxpayers. Recapitalization of other banks and a decline in lending to related parties should be completed,” said David Lipton.
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We will remind, on April 3 the Board of Directors of the International monetary Fund decided to allocate Ukraine one billion dollars.
Ukraine has already received from the IMF under a new extended credit programme 7.7 billion dollars. The last installment was in September of 2016, when Kiev received $ 1 billion.
Overall, the program signed in the spring of 2015, for four years, and the total amount of the loan amount to $ 17.5 billion.
Earlier, the head of the NBU Valery Gontareva said that in spite of the delay of the fourth tranche, the baseline scenario provides for four tranches of the IMF in the amount of $ 5.4 billion in 2017.