The International Monetary Fund and Ukrainian authorities have reached a staff-level agreement on the first review of Ukraine's four-year, US$8.1 billion Extended Fund Facility arrangement, the IMF announced on June 12.
If approved by the IMF Executive Board, the agreement would give Ukraine access to about US$690 million, bringing total disbursements under the programme to US$2.2 billion. The funds are intended to support Ukraine as its economy continues to face pressure from Russia's ongoing war and from the broader economic effects of the Middle East conflict.
All end-March quantitative performance criteria and indicative targets under the programme have been met, according to the IMF. However, two structural benchmarks for the first quarter were implemented with delays, and one was missed. The IMF said a revised timeline for reforms, corrective actions, and additional policy commitments had been agreed to keep the programme on track.
Ukraine's GDP growth is projected to slow to between 1.0 and 1.6 percent in 2026, the IMF said, citing the ongoing war and external shocks. The fund noted that macroeconomic stability had been broadly maintained through sound policies and continued large-scale external support from Ukraine's international partners.
The National Bank of Ukraine has maintained adequate international reserves, preserved financial stability, and kept inflation expectations anchored, the IMF said. Amid supply-side shocks, the central bank has delayed its easing cycle and adopted a tightening bias. The exchange rate has also become more flexible, enhancing its role as a shock absorber, according to the fund.
The agreement covers the 2026 Article IV Consultation, which focused on policies to support post-war growth and create a dynamic market-based economy. Tax system reforms and efforts to reduce the size of the informal economy are among the key priorities. The IMF said the authorities are preparing a roadmap for gradually liberalising the energy market, with social protection mechanisms for vulnerable households.
On the fiscal side, the IMF said expenditure would remain elevated over the medium term for defence and reconstruction, requiring sustained efforts to improve tax administration and mobilise domestic revenues. Commitments include removing the VAT customs exemption for parcels and measures to tackle international transfer pricing to prevent tax avoidance.
The IMF also called for reinvigorated anti-corruption reforms and stronger governance of state-owned enterprises and banks, noting that recent corruption cases underscored the urgency. The independence of the National Bank of Ukraine remains a critical pillar for maintaining macrofinancial stability, the fund said.
Ukraine's EFF arrangement was originally approved in March 2023. The programme remains fully financed on the back of continued external support, according to the IMF.
Sources: imf.org
