Ukraine to clinch first IMF loan to nation at war

BBC reported that the International Monetary Fund (IMF) says it has reached an agreement with Ukraine on funding worth $15.6bn (£12.8bn).

The organisation’s first loan to a country at war is expected to be approved in the coming weeks. It would also be one of the largest financing packages Ukraine has received since Russia’s invasion. The IMF recently changed a rule to allow loans to countries facing “exceptionally high uncertainty”.

“Russia’s invasion of Ukraine continues to have a devastating impact on the economy: activity contracted by 30 percent in 2022, a large share of the capital stock has been destroyed, and poverty levels have climbed,” IMF official Gavin Gray said in a statement.

“The programme has been designed in line with the new fund’s policy on lending under exceptionally high uncertainty, and strong financing assurances are expected from donors, including the G7 and EU.” Gray also said the agreement would “mobilise large-scale concessional financing” for Ukraine from international donors and partners, without giving further details. The funding still needs to be approved by the IMF’s executive board.

The IMF expects Ukraine’s economy to record a slight contraction or growth this year.