IMF raises Ukraine's 2025 financing target from $1.8 bln to $2.7 bln at expense of 2026-2027

MOSCOW. Oct 23 (Interfax) - Ukrainian Finance Minister Sergei Marchenko and Ukrainian National Bank Governor Andrei Pyshny have thanked International Monetary Fund Managing Director Kristalina Georgieva for the IMF's decision to increase the number of tranches and total funding in 2025 under the Extended Fund Facility (EFF).

"As of now, the IMF's EFF provides up to $2.7 billion for 2025 based on the results of four reviews. This amount initially was around $1.8 billion following two program reviews," Ukrainian media quoted the Finance Ministry as saying in a statement on Wednesday following a meeting on the sidelines of the IMF and World Bank annual meeting in Washington.

According to the fifth EFF review, the schedule of program reviews and tranches based on their results was amended at Ukraine's request. Should it earlier have envisaged only two reviews for 2025, in early March and late August, and the allocation of $917.5 million in tranches, now the next year schedule includes four quarterly reviews, as it was this year. The amount of the eighth tranche following the seventh review in March remained unchanged at $917.5 million, while the amount of the next three tranches next year is $809.6 million, $539.8 million and $445.3 million, respectively.

These changes also resulted in an increase in the total number of program reviews from 11 to 13, as well as the reduction of the last three tranches in March and August 2026, as well as in March 2027 to $941.3 million, $1,0007 billion and $1,0696 billion, while previously they were expected to be around $1.3 billion each.

Ukraine got the sixth $1.1-billion EFF tranche on Wednesday following the fifth review, which increased the amount of payments under the program launched in March 2023 to $8.7 billion, with the total amount of $15.6 billion. In total, the IMF has disbursed more than $11.3 billion since the beginning of the crisis, which makes the fund the third largest partner for Ukraine in terms of financial assistance after the European Union and the United States.

Georgieva described the meeting as fruitful. "I commended Ukraine on its resilient economy and the strong performance of its program. I praised their efforts to enhance governance and mobilize revenues for priority spending," she said on social media.

The Ukrainian Finance Ministry said that jointly with IMF Deputy Managing Director Gita Gopinath and Director of the IMF European Department Alfred Kammer, the parties discussed the main indicators of the 2025 draft state budget, key macro indicators and foreign funding needs for the next year. The Ukrainian delegation also met with head of the IMF mission in Ukraine Gavin Gray and the IMF experts.

Marchenko presented the draft state budget, the third one under martial law, and its priorities. "We need the support of international partners. The need for foreign financing for next year is estimated at around $38.4 billion," he said.

The parties agreed on the need to strengthen Ukraine's domestic financial capacity to effectively respond to major challenges posed by the crisis, it said.

In turn, Pyshny said that the talks with the IMF mission team led by its head Gray focused on two key matters, namely, elaborating the sixth review of the scheduled program in December and the outlook of the overall macro framework for 2024-2025.

"Prior to the next program review, the National Bank of Ukraine should complete an assessment of key financial stability risks and update the bank's contingency plan based on the findings. Gavin Gray reiterated that the mission is seeing significant progress in fulfilling this benchmark," Pyshny said.