Lagarde-Gontareva Washington talks: IMF to send mission to Ukraine soon

Monday, April 18, 2016 - 13:49 (EEST) Section: Latest news

Ukraine`s key lender, the International Monetary Fund (IMF), has announced its mission will visit the country soon to examine the economic situation and meet with the newly appointed government, according to Ukraine`s Embassy to the United States.
This was the result of talks between IMF Managing Director Christine Lagarde and Governor of the National Bank of Ukraine Valeriya Gontareva on the sidelines of the Spring meetings of the IMF and the World Bank Group in Washington, D.C., these days, the Embassy said.
”At the meeting, Valeriya Gontareva stressed the highest priority for Ukraine to implement the reforms foreseen by the cooperation program with the IMF. For her part, Christine Lagarde underlined that the Fund is prepared to continue to support our country on its way of economic transformations and stated that the IMF mission will visit Ukraine in the near future,” the Embassy said.
The formation of the new government was a way out of the deep political crisis seen by Ukraine in the past few months and became possible after the creation of a new parliamentary coalition on the basis of two largest parliamentary factions – the Bloc of Petro Poroshenko and the People`s Front whose leader is former PM Arseniy Yatsenyuk.
Outlining the new government`s tasks, Ukrainian President Petro Poroshenko said there was no alternative to cooperation with the IMF.
The four-year EFF program worth about $17.5 billion originally foresaw quarterly revisions of the program, the issue of four tranches to Kyiv in 2015, another four in 2016. However, at present, the country has received only the first tranche worth $5 billion on March 13, 2015, and the second one worth $1.7 billion arrived on August 4, 2015.
The second review is currently under way, as Ukraine and the IMF are in talks on a large range of issues, including monetary, banking, anti-corruption policy, pension reform, and privatization. The result of the review should be a memorandum, which is to be approved by the Ukrainian government and the IMF`s Executive Board.
The endorsement of the memorandum will pave the way for the third tranche worth $1.7 billion. The arrival of the third tranche will also let Ukraine additionally raise $2.3 billion in financial aid: $1 billion in guarantees from the U.S. government and loans from the European Union and the World Bank.
Early in April, the IMF reviewed its macroeconomic forecasts for Ukraine in 2016, having set economic growth at 1.5% and inflation at 15.1%. However, it kept its projections for unemployment in Ukraine at 9.2% (in keeping with the International Labour Organization`s methodology).