The International Monetary Fund is prepared to provide sizable economic support for Ukraine under a new full-fledged loan program, Managing Director Kristalina Georgieva said.
(Bloomberg) — The International Monetary Fund is prepared to provide sizable economic support for Ukraine under a new full-fledged loan program, Managing Director Kristalina Georgieva said.
President Volodymyr Zelenskiy’s administration intends to clinch a new deal with the Washington-based lender as soon as next month, with a goal of securing $5 billion during the first year, according to people familiar with the discussions. Prime Minister Denys Shmyhal said Monday that Ukraine expects to get more than $15 billion overall.
Georgieva praised Ukraine’s efforts to transform its economy, which contracted more than 30% in 2022 as Russian President Vladimir Putin’s troops invaded the country, killing tens of thousands of people, battering entire industries and leveling cities in an attack condemned by the international community.
“Based on the performance of the Ukrainian authorities, we are confident that it could be sizable support from us,” Georgieva said in an interview after a visit to Kyiv on Monday.
Ukraine has so far tapped $2.7 billion in aid under a rapid-financing instrument during the war. Though the IMF doesn’t usually grant full-fledged loan programs for countries mired in military conflict, it may make an exception, given the scale of the war and its significance to the world.
To facilitate a full-fledged deal, Kyiv and the IMF are already cooperating in a non-cash monitoring agreement, which is seen as a precondition for a multi-billion loan program.
“You would see us making very rapid progress on the new program, because we have a sound foundation for it from a program with board monitoring that we have just completed,” she said.
The IMF’s latest review confirmed Ukraine’s progress but didn’t provide any potential details of a new aid program. Still, Georgieva intimated that it would be a long-term commitment.
“We are certainly talking about longer duration because clearly Ukrainian policy challenges are not going to evaporate any time soon,” she said.
Corporate governance and fighting corruption will be a major part of the program, Georgieva said, adding that the bolstering of institutions needed to improve further.
“Ukraine can make progress in the fight against corruption because people are not going to tolerate money being diverted and stolen when bombs are falling,” she said. “I heard no attempt to sugar-coat the issue, nor a lack of appetite to work with us.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.