The IMF announced on Friday that it has struck a staff-level agreement with the Ukrainian government, opening the path to a complete loan that would also help the nation’s application to join the European Union.
According to Gavin Gray, the IMF mission’s leader, Ukraine’s performance during a four-month program with the organization was seen as having been “solid,” meeting all of its goals and criteria.
The government, among other things, is addressing arrears and has submitted to Parliament a package of draft tax regulations targeted at increasing revenues.
“A fully-fledged IMF program would be supportive of the Ukrainian government’s efforts toward EU accession,” Gray said in a statement.
The government is “making headway in reforms to strengthen governance, anti-corruption, and rule of law, and establish the foundations for post-war growth,” the official added.
The reform agenda, however, is still quite important.
Less severely than expected, Ukraine’s economy dropped by 30% last year, but the cost of recovery and reconstruction is expected to be in the hundreds of billions of dollars.
“The public sector will play an important role in the reconstruction process,” said Gray.
Increasing the “efficiency and openness of public finances and governance will be crucial,” he continued.
Millions of people have been displaced since Russia invaded Ukraine almost a year ago, and as a result of the war’s aftermath, food and energy prices around the world have increased.
In addition to the IMF’s cooperation with Ukraine, the World Bank has also raised more than $18 billion in emergency funding for the nation, with more than $16 billion distributed thus far through projects.