KYIV, Oct. 19 - The International Monetary Fund said it had reached a new agreement with Ukraine, paving the way for a fresh $4 billion loan, RFE/RL reported Friday.

The agreement followed an announcement earlier on Friday by Prime Minister Volodymyr Groysman that household gas rates would rise by nearly 25 percent.

Aid from the fund, known as the IMF, has been essentially frozen since April 2017 as Ukraine's government has slowed efforts at major economic reforms.

The IMF said the new 14-month deal would replace an existing financial-aid package that was first agreed to in
March 2015, about a year after the country was plunged into turmoil amid the so-called Euromaidan mass protests.

Final approval, which must still come from the fund's board later this year, will be contingent on Ukrainian lawmakers approving a 2019 budget that is "consistent with IMF staff recommendations," the IMF said.

That must include increases in household gas and heating rates.

In televised comments earlier on October 19, Groysman said gas prices would be raised by nearly 25 percent beginning November 1. He said Ukraine risked default if it failed to meet the IMF conditions.

"We have no other option to prevent extremely difficult events," Groysman said.

The hike in gas rates is politically unpopular and comes just as the country is gearing up for presidential elections in March.

Gas rates have been kept artificially low since the Soviet era, which economists say has resulted in waste and inefficiency.

Meanwhile, Ukraine plans to borrow $2 billion on foreign markets in 2018 for the first half of the year, acting Finance Minister Oksana Markarova said.

"Almost $2 billion should have been borrowed [at the beginning of the year]. And we are still planning to attract the funds," Markarova said.

Markarova said the plans to attract funds from international financial institutions and issue eurobonds are being considered.

The finance minister said that in 2018, the maximum amount of the deficit, approved by the national budget, "will be met for sure."

"I hope that it will be possible to get all the revenues and get all the funding, and if not, we will make a change in financial terms to keep to the benchmarks," Markarova said, adding that in past months the national budget met revenue targets by almost 100%. (rfe/ez)