27 Feb 2023 09:49

G7 boosts Ukraine financial support to $39 bln, calls for program with IMF to be opened

MOSCOW. Feb 27 (Interfax) - The Group of Seven countries, based on the Ukrainian government's needs, have increased their commitment of budget and economic support for Ukraine to $39 billion for 2023, Ukrainian media said, citing a joint statement of the G7 finance ministers and Central Bank governors.

"We, together with the international community, remain strongly committed to addressing Ukraine's urgent short-term financing needs [...] These significant commitments and their swift disbursement give Ukraine certainty and enable the authorities to safeguard the functioning of government, continue the delivery of basic services, carry out the most critical repairs of damaged infrastructure and stabilize the economy," according to the statement, which was circulated on Thursday, February 23.

The meeting of the G7 finance ministers and Central Bank governors in Bengaluru, India, was also attended by senior officials of the International Monetary Fund, the World Bank, the Organization for Economic Cooperation and Development, and the Financial Stability Board, it said. Ukrainian Finance Minister Sergei Marchenko attended by video link.

The ministers also reiterated their strong support for the IMF's close engagement with Ukraine and welcome the progress made to complete a review under the IMF Program Monitoring with Executive Board Involvement.

"We urge the IMF and Ukraine to deliver a credible, ambitious, fully financed and appropriately conditioned IMF program by the end of March 2023," the statement said.

The statement also recognizes the important efforts made by the World Bank Group (WBG) to channel a significant amount of support for Ukraine, including through the Public Expenditures for Administrative Capacity Endurance (PEACE) facility and the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF). The ministers welcomed the work of the International Finance Corporation as well as the initiative of the Multilateral Investment Guarantee Agency to launch its new trust fund to support private investment in Ukraine.

"We will continue our joint efforts to support and contribute to Ukraine's repair of its critical infrastructure, recovery and reconstruction, including through the Multi-agency Donor Coordination Platform. We will also closely coordinate with relevant international financial institutions, including the WBG, the European Bank for Reconstruction and Development and the European Investment Bank," the ministers said.

As reported, Ukraine hopes that the IMF Monitoring Program will be replaced with an Extended Fund Facility as early as the beginning of the second quarter of 2023. That could partially cover the gap in coverage for Ukraine's projected $38 billion budget deficit in 2023. This gap is now estimated at about $10 billion.