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preliminary results of the mission for the preparation of the second revision of the EFF program with the IMF show that the country’s economic management, despite conditions of war, is outstanding. Georgieva noted economic recovery is happening faster than initially expected, and growth this year will most likely be at the upper level of the IMF's forecast of 3%. "Secondly, we have witnessed the continuation of structural reforms, which are difficult even in peacetime. We also see policies that protect macroeconomic and financial stability, lowering inflation in Ukraine," the head of the IMF emphasized.
Private investment can provide a third of Ukraine’s needs for recovery,
said the president of the World Bank Group, Ajay Banga. He also noted that the World Bank positively assesses Ukraine's course on implementing reforms. "The Minister of Finance, Mr. Marchenko, and I met yesterday and discussed how Ukraine can attract more private investment for future growth by defining a clear policy course in key sectors," Banga said. He emphasized that he was happy to hear from the minister that Ukraine is developing a multi-year plan, including reforms that encourage competition and bring the country closer to EU standards. "If appropriate conditions are created, according to our estimates, almost a third of Ukraine's future needs could be met with financing from the private sector," Banga said. He also noted that the World Bank sees potential in expanding the digital infrastructure in Ukraine, introducing green energy technologies, and continuing land reform.
The IMF will allocate $900M to Ukraine at the end of 2023, but there are conditions. IMF Director Kristalina Georgieva stated that this financing will take place under the Enhanced Funding Program (EFF). "In June, we completed the first review of this program, bringing the IMF's support this year to $3.6B of the $15.6B available under the program. Additional funds will be available in December following the completion of the second review and subject to approval by the Board of Directors," said Georgieva. According to her, Ukrainian authorities have made good progress, including the restoration of the pre-war tax system, the fight against corruption, and the transition to managed exchange rate flexibility. The head of the IMF noted that, according to the organization’s latest estimates, Ukraine's external financing needs in 2024 will be $3B higher than at the time of the first review and arranging $31.9B in support will be required.
The IMF has announced the creation of the Capacity Development Fund for Ukraine, with $14 million already received from donors, National Bank of Ukraine Governor Andriy Pyshnyi said in a post on Facebook.
The EU will provide Ukraine with €4.5B by the end of the year, while Ukraine hopes for another $2.3B from the US. The EU has become Ukraine's largest donor in 2023, with €13.5B already allocated as part of a macro-financial aid instrument, and expects to provide additional funding for the Ukrainian budget by the end of the year, European Economic Commissioner Paolo Gentiloni said on October 12. He noted that Ukraine has demonstrated the ability to continue to carry out critical economic reforms, recalling that the current terms of EU financial assistance include, among other things, judicial reform, improved regulation of economic activity, and improvement of the bankruptcy regime. At the same time, Prime Minister Denys Shmyhal announced that Ukraine, which since the beginning of this year has received $10.9B in state budget funding from the US in the form of grants, expects to increase this amount to $13.2B by the end of this year. He notes that this year's budget deficit remains at 20% of GDP.
54 UKRAINE Country Report November 2023 www.intellinews.com