IMF completes first review of Ukraine’s new extended financing program (Photo: REUTERS/Yuri Gripas)
The International Monetary Fund’s Executive Board completed the first review of Ukraine’s four-year Extended Fund Facility program, clearing the immediate disbursement of SDR 503 million, or about $690 million, as a second tranche.
The IMF said Ukraine had missed or delayed several reform benchmarks and warned against backtracking, the fund’s communications department said.
“Ukraine’s program performance has been broadly satisfactory. All end-March quantitative performance criteria were met, although implementation of some structural reforms was delayed,” the IMF said.
Reform implementation has slowed, with several structural benchmarks completed late or left unmet, the fund said.
“The authorities agreed on corrective actions and revised timelines for key reforms, while reaffirming their commitment to meeting the program’s objectives in the fiscal, governance, anti-corruption, energy and financial sectors,” the IMF said.
“Directors cautioned against reform backsliding and recommended strengthening coordination and building broad support for key reforms,” it added.
Total disbursements under the program will reach about SDR 1.6 billion, or roughly $2.2 billion, including the first tranche, the IMF said.
The board also concluded its 2026 Article IV consultation with Ukraine, focusing on policies needed to preserve macroeconomic stability during the war and support the country’s transition to a dynamic market economy aligned with its EU accession goals.
“Key priorities include reducing the informal economy; strengthening domestic revenue mobilization, including by combating tax evasion and avoidance; improving the investment climate; strengthening governance and anti-corruption institutions; advancing state-owned enterprise reforms; improving public investment management; and promoting further financial inclusion,” the IMF said.
Ukraine’s economic outlook has weakened, primarily because of intensified attacks on critical infrastructure and the adverse effects of the war in the Middle East, the fund said.
The IMF expects Ukraine’s economic growth to slow from 1.8% in 2025 to between 1% and 1.6% in 2026 before accelerating to 3.5% in 2027.
Inflation is projected to rise to 10.5% this year before returning to the 2025 level of 8% in 2027.
Ukraine’s unemployment rate is expected to fall from 11.6% to 10.2% in 2026 before rising again to 11.3% in 2027, the IMF said.
The state budget deficit, excluding grants, is projected to narrow from 23.5% of gross domestic product in 2025 to 21.1% in 2026 and 17.8% in 2027.
Public debt is expected to peak at 111.8% of GDP in 2026, up from 107.1% in 2025, before declining to 110.3% in 2027.
Ukraine’s international reserves are projected to rise from $57.3 billion to $65.5 billion in 2026 and reach $66.6 billion in 2027.
Prime Minister Serhii Koretskyi held his first international call after taking office with IMF First Deputy Managing Director Dan Katz.
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