The IMF established 12 additional requirements for Ukraine for further support

The International Monetary Fund (IMF) on Monday updated the memorandum on economic and financial policy as part of the second review of the credit program. The text of the document states that Ukraine has undertaken 12 additional requirements.

Of the previous requirements, Ukraine fulfilled 11, but four — with a delay.

One of them — the creation of a conceptual note on the "5-7-9" program with proposals to leave it only for small and medium-sized companies — Ukraine did not fulfill, it was postponed to the end of March.

Until the end of the year, there are still three "old" requirements:

• revision of the current procedures of state investment management;
• approval of the National Revenue Strategy;
• adoption of legislation to increase the institutional independence of the SAP.

However, the preparation of the principles for the rehabilitation of banks in consultation with the FGVFD and IMF experts was postponed from the end of March 2024 to the end of December 2024, but the beacon about "introduction of risk assessment methodology during supervision" remains at the end of June.

Among the new requirements in the list are the following:

• find sources to increase own revenues of the 2024 budget by 0.5% of GDP (end of February);
• change the CPC in the part of consideration of HACC cases by one judge or a panel of three judges (end of March);
• adopt a law on restarting the Bureau of Economic Security (end of June);
• conduct an external audit of the financial condition of heating and communal energy companies, with a breakdown of debts before and after February 2022 (end of June);
• conduct an audit of the effectiveness of tax benefits and losses from them (end of July);
• adopt a law on the creation of a new court to consider cases against state bodies — NBU, NABU, NACP (end of July);
• to develop the policy of state ownership of state-owned enterprises, dividend policy and privatization strategy (end of August);
• determine the state companies most affected by the war and prepare an assessment of potential fiscal and quasi-fiscal risks (end of September);
• conduct an external audit of NABU efficiency (end of September);
• with the help of the IMF, conduct a diagnosis of the pre-war process of medium-term budget preparation to strengthen the strategic approach to the budget (end of October);
• adopt a resolution with an action plan that will establish a clear link between medium-term budget planning and capital expenditures, as well as designate the Ministry of Finance as responsible for supervision (end of December);
• keep all state banks under the control of the Ministry of Finance, transfer all nationalized non-systemic banks to the Deposit Guarantee Fund (permanent requirement).

Aid from the IMF

On December 11, the Board of Directors of the International Monetary Fund approved the second review of the Extended Fund Facility (EFF) for Ukraine. This means almost $900 million in direct budget funding.

The IMF approved the four-year extended financing program of Ukraine (the Extended Fund Facility) in the amount of $15.6 billion in March. The program is included in the general package of support to Ukraine by international partners in the amount of $115 billion.

But at the end of 2023, Ukraine faced the risk of not receiving part of the aid from this package. In particular, political disputes in the United States are hampering the allocation of $11 billion in aid in 2024. The lack of American money included in the program with the IMF may call into question the entire program with the Fund, Ukrainian officials noted.