KYIV, April 15 – The International Monetary Fund on Wednesday praised Ukraine for handling the coronavirus pandemic and noted that progress had been made in talks over resumption of lending, provided required legislation is approved soon.

Poul M. Thomsen, Director of the European Department of the IMF, said there are issues that are still outstanding in the talks, but said he expected those to be addressed quickly.

"We are in discussions with Ukraine on a new program [EFF]. These discussions are well advanced, and I think they are going well,” Thomsen said. “There is a number of issues outstanding and I’m confident that they will be overcome soon."

The number of coronavirus cases in Ukraine rose by 392 to 3,764 on Wednesday, while the number of deaths increased by 10 to 108, according to the Healthcare Ministry. The government declared quarantine on March 24 through April 24, issuing stay-at-home order for most parts of the country.

Meanwhile, Ukraine’s economy is expected to contract 7.7% on the year in 2020 due to the impact from the coronavirus pandemic, the IMF said in its annual World Economic Outlook report. The economy will rebound and grow 3.6% on the year in 2021, the report said.

Ukraine’s consumer prices will probably grow 4.5% on the year in 2020, and will accelerate increase to 7.2% on the year in 2021, the IMF said.

"As a result of the pandemic, the global economy is projected to contract sharply by 3% in 2020, much worse than during the 2008–09 financial crisis. In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8% in 2021 as economic activity normalizes, helped by policy support," the IMF said.

A key legislation that is required by the IMF and is yet to be approved by Ukraine includes the banking bill that was approved in the first reading on March 30. It seeks to prevent former owners of banks that were nationalized or liquidated in recent years from regaining ownership rights or receiving monetary compensation.

Analysts said the bill’s main purpose was to prevent one of Ukraine's most-powerful tycoons, billionaire Ihor Kolomoyskiy, the former co-owner of PrivatBank, from regaining ownership rights to the bank. Lawmakers loyal to Kolomoyskiy submitted more than 16,000 amendments, apparently in an effort to postpone its review. One of the amendments, for example, suggests renaming the bill and calling it ‘The Anti-Kolomoiyskiy Law.’

David Arakhamia, the leader of President Volodymyr Zelenskiy’s party in Parliament, said Ukraine must approve the bill no later than May 5 in order to get the IMF lending by the end of May.

Arakhamia said if the bill is delayed beyond May 5, Ukraine “will have a problem,” adding that the government is due to make massive foreign debt payments at the end of May and needs the IMF’s support.

Ukraine and the IMF discussed $5.5 billion Extended Fund Facility (EFF) loan in December 2019, but the subsequent outbreak of coronavirus had increased the burden on the country with the government now seeking to expand the program to $9.5 billion. (tl/ez)