Ukraine and its international donors have set the course for a new billion-euro financing package. The loan program promised by the IMF is intended to give the country attacked by Russia access to 15.6 billion US dollars (around 14.5 billion euros), as the Washington-based International Monetary Fund announced on Tuesday.
The technical level agreement (a so-called Staff Level Agreement) is subject to approval by the Executive Board. The test is expected to take place in the coming weeks, it said.
In addition to the terrible humanitarian consequences, Russia’s invasion of Ukraine continues to have a devastating impact on the economy, according to the IMF. “Economic activity fell by 30 percent in 2022, much of the capital stock was destroyed, and poverty rose.” The IMF expects Ukraine’s economy to slowly recover in the coming quarters “as the economy recovers from severe damage to critical infrastructure, albeit headwinds remain, including the risk of further conflict escalation.” .
The goals of the aid program are to maintain economic and financial stability amid “extraordinarily high levels of uncertainty” and long-term growth as part of post-war reconstruction. Ukraine had tried to get the billion-dollar aid program – months of negotiations had preceded it. The IMF recently changed its rules to allow lending programs for countries facing “extraordinarily high levels of uncertainty”. This move has paved the way for the new loan program, which is expected to run for four years.
