The International Monetary Fund’s executive board on Thursday completed its first review of Ukraine’s $15.6 billion loan program, allowing Kyiv to immediately withdraw $890 million for budget support as it mounts a major offensive against Russia’s invasion.
The board’s approval brings Ukraine’s withdrawals under the program launched on March 31 to around $3.6 billion so far.
The IMF said Ukrainian authorities have made “strong progress” toward meeting reform commitments under “challenging conditions,” meeting quantitative performance criteria through April and structural benchmarks through June.
“Russia’s invasion of Ukraine continues to have a severe impact on human and physical capital, and the environment, with loss of life, drop in living standards and rise in poverty, as well as damage to infrastructure,” IMF Managing Director Kristalina Georgieva said in a statement.
“Nevertheless, the Ukrainian people have been resilient, and the authorities’ skilful policymaking and continued external support have helped support macroeconomic and financial stability,” Georgieva added.
A senior IMF official told reporters that the IMF is continuing to study the social, environmental and economic impacts of the destruction of the Kakhovka Dam earlier this month, which caused widespread flooding in southern Ukraine.
The official said that the IMF initially expects the disaster to increase food prices and push up inflation in the country.
Nonetheless, the IMF reiterated the 2023 Ukraine economic forecast, recently upgraded to growth of 1% to 3%, from a March forecast range of a 3% contraction to 1% growth, as the new loan program underpins the economy.
The IMF expects to carry out its next review of Ukraine’s program in late November or early December, the official added.