By Andrea Shalal
WASHINGTON (Reuters) -The International Monetary Fund is committed to working with Ukrainian authorities to shape a new lending program after the war-torn country filed a formal request earlier this week, IMF spokesperson Julie Kozack said on Thursday.
Ukraine is spending about 60% of its total budget to fund its battle against Russia’s invasion and relies heavily on financial support from its Western allies to cover the cost of pensions, public sector wages and humanitarian spending.
Following Kyiv’s request for a new program as a successor to the existing $15.6 billion support program, IMF staff will now engage with the Ukrainian authorities on macroeconomic policies needed to maintain stability, finance critical expenditures and restore debt sustainability, Kozack told a regular briefing.
Ukraine has received about $10.6 billion under its existing $15.6 billion Extended Fund Facility program, but budget experts say its needs are far greater given the ongoing battle against Russia’s invasion in February 2022 and continued damage to critical infrastructure.
Bloomberg reported on Thursday a discrepancy of $10 billion to $20 billion in mid-term financing needs between the IMF and the government in Kyiv, citing an official familiar with current discussions.
FOCUS ON MOVING TO NEW PROGRAM
“The focus is very much on moving to the new program,” Kozack told reporters, without acknowledging the shortfall report. She added that IMF staff would meet with the Ukrainian authorities to discuss a timeline for the new program, Ukraine’s fiscal needs and the appropriate assumptions about the war.
“Right now, staff is working jointly with the authorities to look at the financing needs for the remainder of 2025, 2026 and over the medium term, the work that’s underway is going to integrate proposed fiscal measures and a fiscal plan,” she said.
The IMF was also pushing for expenditure restraint and efforts to mobilize more revenue, as well as external financing strategies, she said.
(Reporting by Andrea Shalal; Additional reporting by Rodrigo Campos; Editing by Richard Chang)
