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Ukraine hopes to stop relying on IMF loans
Journal Staff Report

KYIV, Sept. 4 - Ukraine may be able to do without borrowing from the International Monetary Fund after the current $17.5 billion four-year lending program expires, Finance Minister Oleksandr Danyliuk said Monday.

"The macroeconomic situation has stabilized. In 2016, economic growth has resumed. I really want our sixth IMF program to be fully implemented and become the last one, Danylyuk said. Ukraine with its potential can and should become economically and financially self-sufficient.

Meanwhile, Ukraine is likely to receive the fifth tranche from the IMF by the end of this year after the fourth revision of the EFF program, Morgan Stanley investment bank said in a report.

"We believe that government ownership of reforms and willingness to cooperate with the IMF remain, although this will come more into conflict with pressure for populism in 2018. We keep our call and expect the fifth IMF tranche by the end of 2017," the report said.

Morgan Stanley said the delay of land reform until 2018 is not so fundamental for the IMF, because it is not among the necessary requirements for obtaining the next tranche. However, the fund expects Ukrainian authorities to introduce pension reform this autumn, privatization of state enterprises, the adoption of anti-corruption measures and an increase in gas tariffs scheduled for October 1.

Among the positive signals for the IMF analysts indicate the expected presentation of the candidacy for the post of head of the National Bank, which is to be held by the end of September.

Ukraine's central bank said on July 6 that the government's delays in passing reforms mean Ukraine will probably receive $3 billion in aid from the International Monetary Fund this year instead of the $4.5 billion originally envisaged.

The government is trying to push contested legislation through parliament, including raising the pension age and lifting a ban on land sales, as part of a $17.5 billion bailout agreed with the IMF in 2015.

One tranche of IMF aid will likely be postponed until 2018, according to acting Central Bank Governor Yakiv Smoliy.

Ukraine received $1 billion tranche from the IMF in April, while the S&P rating agency predicted that the country will probably get the next tranche of the loan sometime in the second half of the year.

The central bank earlier this year cut its economic growth forecast for 2017 to 1.6 percent from 1.9 percent and said inflation had accelerated to 15 percent year-on-year in June, higher than predicted. (nr/om/ez)




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Currencies (in hryvnias)
  22.09.2017 prev
USD 26.24 26.19
RUR 0.451 0.451
EUR 31.24 31.45

Stock Market
  21.09.2017 prev
PFTS 291.2 290.9
source: PFTS

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