Kyiv September 11, 2022: Ukraine’s top Cabinet official panned slow progress from the International Monetary Fund in moving ahead with a new assistance package for the war-torn nation.
Prime Minister Denys Shmyhal gave credit to the IMF for its abundant past support of Ukraine, including in 2014-2015 after Russia annexed the Crimean peninsula and fomented military conflict in the country’s east.
But he said the Washington-based lender had been too slow to reach a new deal now that Ukraine is fighting back against a full-scale invasion by President Vladimir Putin’s troops, now into its seventh month.
Kyiv officially applied for a new IMF loan program in August and hoped to get an initial disbursement as early as November. But the lender has been slow to move ahead compared with other donors, according to Shmyhal.
“After seeing leadership from the US and Europe we have a quite passive attitude from the IMF,” Shmyhal told participants of the Yalta European Strategy Conference in Kyiv on Saturday. “But we are doing our best, we have submitted all the required documents to the IMF and we are urging our partners to accelerate their action.”
The meeting was organized by Ukrainian businessman Victor Pinchuk.
Ukraine’s government hasn’t provided details of the new loan it’s requesting from the IMF. Earlier, central bank Governor Kyrylo Shevchenko told Reuters Kyiv is seeking as much as $20 billion. Although there’s a perception that the IMF doesn’t provide assistance to countries at war, this is not the case, according to Shevchenko’s deputy, Serhiy Nikolaychuk.
The problem for the fund is war-related uncertainty. It isn’t yet clear what impact Russia’s invasion will have on Ukraine’s economy, not to mention how long the war will last.
Ihor Shpak, a spokesman for the IMF’s office in Ukraine, declined to comment.
The IMF granted $1.4 billion to Ukraine in rapid financing to shore up its public finances in March, a few weeks after Russia’s invasion. But the nation needs more as it faces a fiscal gap of as much $5 billion monthly, according to government estimates. Kyiv is also scheduled to repay about $4 billion in debt to the IMF by 2024.
Apart from expecting to get more funds from its allies, Ukraine’s government is also looking to cut its budget deficit by 40% to $3 billion monthly in 2023, Shmyhal said.
