This is a decision that Ukraine was waiting with impatience. Yesterday evening, the Board of directors of the IMF approved an aid program of $ 5 billion in its favour. 2.1 billion will be released immediately, ” said the institution in a press release. The new plan, with a duration of 18 months, aims to help Ukraine to cope with the challenges of the pandemic Covid-19″, said the international monetary Fund. In addition, it is to preserve “the achievements made to date in advancing a small package of structural reforms key to ensure that Ukraine is well placed to return to growth, once the crisis is over”.
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The institution of Washington believes that the balance of Ukraine “on the stabilization of the economy was “strong” over the last five years. However, she urges more reforms “to ensure that growth is robust and inclusive.”
For the time being, the Fund acknowledges that “the pandemic of Covid-19 has significantly worsened the prospects” of the country forcing the authorities to focus in priority on measures of containment to stop the virus. “The uncertainty is great and the economy is expected to contract sharply in 2020, because of the containment measures stringent, in Ukraine and in the world – has resulted in a significant decline in domestic and external demand,” warns the IMF. The budget for 2020 should be “hit hard”, with a sharp decline in revenues and significant expenses of emergency needed to deal with the health crisis.
The agreement has been concluded within the framework of what the Fund called a reaffirmation Agreement, the technical term to designate one of the instruments of financing -usually in exchange for a program of reforms – the most commonly used by the Bretton Woods institution. This program has received an in-principle agreement on may 21, but had yet to get the green light from the board of directors.
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It follows the previous programme for a period of 14 months was approved in December 2018 of $ 3.9 billion, which was intended to maintain stability during the election year, recalls the Fund.
In the framework of the new programme, four priorities have been defined: mitigate the economic impact of the crisis with support to households and businesses; ensure the independence of the permanent central Bank and a flexible exchange rate; preserve financial stability; finally move forward with key measures of governance and fight against corruption “to preserve and deepen recent gains”.
at the End of march, the Ukrainian parliament had definitively passed an act authorizing the sale of its fertile agricultural land, especially to their farmers, which was a key condition for unlocking the financial assistance of the IMF. Kiev has also adopted on 13 may a law prohibiting the cancellation of the nationalization of the country’s first bank, Privatbank.
In the framework of the previous plan, in the Ukraine, which is one of the poorest countries in Europe, had obtained a one-time payment of $ 1.4 billion for lack of reforms sufficient, and corruption.
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