IMF views Ukraine monitoring program as important anchor for donors

MOSCOW. Oct 26 (Interfax) - The Ukraine monitoring program of the International Monetary Fund (IMF) to be accomplished with the participation of the IMF Executive Board is an important step on the path towards Ukraine's funding by international donors and the IMF in 2023, IMF Alternate Executive Director for Ukraine Vladislav Rashkovan said.

"The program itself is a very important anchor, because if the IMF puts its name, then it [means] for all investors that the IMF believes in this macro framework. And this is a very important signal for other donors that it is possible to finance the country," Rashkovan told Ukrainian reporters on the sidelines of the International Expert Conference on the Recovery of Ukraine in Berlin on Tuesday.

Any IMF program needs a macro framework besides emergency financing, Rashkovan said. "This is a set of macro indicators that are in the system: GDP forecast, inflation forecast, forecast for many indicators," he said.

It is extremely difficult to build such framework for Ukraine today because of the utmost uncertainty, so the IMF abstained from forecasting indicators for Ukraine in 2023 and subsequent years in the World Economic Outlook, Rashkovan said.

At the same time, the IMF has the Staff Monitoring Program designed to operate under such conditions: this is a more flexible program that allows for volatility, he said.

"The monitoring program is not a monetary program, but it serves as a bridge to move on to the next program [with funding]. It is also approved by the Executive Board," Rashkovan said.

Back on October 21, IMF Mission Chief for Ukraine Gavin Gray reported productive discussions and extension of the work on a monitoring program, requested by Kiev, with the participation of the Executive Board in the coming weeks. The program is expected to lay a foundation for a full-scale funding program of the IMF. U.S. Secretary of the Treasury Janet Yellen said last week that the IMF's full-scale program for Ukraine might be ready at the beginning of next year.

National Bank of Ukraine Governor Andrei Pyshny said at the end of the mission that the next round of negotiations with IMF experts on the preparations for the monitoring program was due in November, and the program might be approved in December.

Ukrainian Finance Minister Sergei Marchenko said that the government estimated the need for funding budget deficit in 2023 at $3 billion to 4 billion per month, compared to $5 billion per month in 2022, which Ukraine had not managed to secure.

The draft budget of Ukraine for 2023, which passed the first reading, envisages external financing of the budget deficit in the amount of $38 billion, or roughly $3.2 billion per month, including $15 billion from the IMF.