IMF Mission and the Ukrainian authorities have reached staff-level agreement on a new 48-month, extended arrangement under the Extended Fund Facility (EFF), with a potential access of SDR5.94 billion (USD 8.1 billion).
IMF staff led by Gavin Gray, IMF Mission Chief for Ukraine, held discussions with the Ukrainian authorities in Kyiv from 17 to 21 November.
The new agreement covers a set of fiscal and monetary policies to anchor the program. The main goals include maintaining macroeconomic stability, restoring debt sustainability and external viability, tackling corruption, and improving governance.
The new program could be brought to the IMF’s Executive Board for approval upon completion of the prior actions and subject to adequate financing assurances from donors.
The IMF expects the program to catalyze large-scale external support to close Ukraine’s financing gaps. In the baseline, the total financing gap is calculated at around USD 136.5 billion for 2026-29. In 2026-27, Ukraine faces a residual financing gap (taking into account existing financing commitments) of around USD 63 billion, the IMF’s press release says.
It underlines that the IMF welcomes all efforts to secure a durable peace. The program is expected to be recalibrated as needed at each review depending on progress towards a resolution of the war.
In its press release, the IMF states that after eight successful reviews under Ukraine’s most recent IMF program, the Ukrainian authorities have assured that a new EFF will provide a strong anchor for their medium-term plans and support their efforts to mobilize much needed external support. Reforms will continue, despite the challenges of the war, and the new program will enable them to close financing gaps and restore external and debt sustainability.
The economy of Ukraine has continued to show resilience despite the recent intensification of attacks on energy and other critical infrastructure. However, risks to the outlook remain exceptionally high given uncertainty on the duration and intensity of the war, as well as the timing and level of additional international donor support. Prompt action by donors is essential to help Ukraine meet its significant fiscal and external financing needs and avoid liquidity risks, IMF said in its statement.
The Ukrainian authorities are committed to: enacting a budget for 2026 that is consistent with the program framework; avoiding inefficient expenditure or the introduction of tax exemptions; implementing domestic revenue mobilization measures, which will also need to be supplemented with timely and large-scale external donor financing on grant-like terms to ensure debt sustainability; implementing the debt restructuring strategy; preventing tax evasion and avoidance; taxing income earned through digital platforms; tackling economic informality, etc.
The IMF stated that the National Bank of Ukraine (NBU) continues to implement monetary policy to achieve the goals of maintaining macroeconomic stability and ensuring sustainable disinflation. The NBU is committed to reducing inflation towards the 5 percent target during its three-year policy horizon, while allowing greater exchange rate flexibility to adjust to underlying fundamentals and increasing the exchange rate’s role as a shock absorber, thereby also helping to preserve adequate central bank FX reserves.
The IMF also expects the continuation of anti-corruption reforms and the continuation of reforms of state-owned enterprises, in particular, changes to the procedure for appointing managers of state-owned enterprises and state-owned banks.
"I would like to thank the IMF team for their deep understanding of Ukraine's circumstances and for recognizing the importance of maintaining flexibility in decision-making, given how quickly the agenda can change. We succeeded in reaching a shared vision for future cooperation. We are approaching a new stage in our partnership. I believe that together we can build the financial foundation Ukraine needs," said Andriy Pyshnyy, NBU Governor.