The Board of Directors of the International Monetary Fund has officially approved an extended financing program for Ukraine totaling $8.1 billion. This was announced by Prime Minister of Ukraine Yulia Svyrydenko, who emphasized that this decision is critically important for maintaining the country's macro-financial stability amid the ongoing war, writes UNN.
Details
According to Yulia Svyrydenko, the first tranche of about $1.5 billion will arrive in the state budget in the near future. These funds will be used to cover the budget deficit and finance priority social expenditures.
It is very important for us that in the fifth year of the full-scale war, Ukraine has guaranteed international support from partners and resources for the stable operation of the state.
The IMF program is part of a broader financial strategy that aims to cover the projected budget deficit of $136.5 billion over the next four years, which will enable the government to plan for economic recovery.
The IMF's role as a financial anchor for international assistance
The approval of this program paves the way for large-scale support from other international donors, including a €90 billion loan from the European Union.
In addition to direct financing, the agreement with the Fund provides for the extension of the moratorium on servicing official debt to G7 countries and international financial institutions.
I thank the entire team that worked on preparing the decision: President Volodymyr Zelenskyy, the government, the Ministry of Finance, the National Bank, our representative to the IMF, and all international partners. Special thanks to the Fund's leadership for their consistent support of Ukraine and personally to Kristalina Georgieva, who visited Kyiv in January.
Recall
As reported, the IMF softened the conditions for a new financing program for Ukraine, moving prior actions to "beacons." Prime Minister Yulia Svyrydenko announced that the Cabinet of Ministers will not submit a bill on mandatory VAT registration for individual entrepreneurs with a turnover of more than UAH 1 million in February.
Before that, Bloomberg reported that Ukraine was seeking to soften an unpopular tax bill concerning VAT for individual entrepreneurs, which the IMF demanded. This law was called a condition for unlocking more than $8 billion under the financing program.
In December, the Ministry of Finance published a draft law on the introduction of VAT for individual entrepreneurs from 2027. The changes provide for a reduction in the single tax rate from 5% to 3% for individual entrepreneurs of the 3rd group who reach the limit of UAH 1 million, and mandatory VAT registration.