Ukraine Faces Risk of Missing $1.66 Billion IMF Installment Amid Parliamentary Delays

Current Status of Ukraine’s IMF Funding

According to 5 канал — Економіка: Ukraine is at risk of not receiving a $1.66 billion disbursement from the International Monetary Fund (IMF) by the end of 2023 due to insufficient progress on key structural reforms. The primary obstacle is the delay in passing essential legislation by the Verkhovna Rada, Ukraine’s parliament. Lawmaker Roksolana Pidlas emphasized that the main issue stems from the parliament’s slow decision-making.

Legislative Requirements for IMF Program Review

To advance the next stage of its IMF program review, Ukraine must fulfill several parliamentary commitments, including:

• Approval of draft law No. 15111-d, addressing taxation of digital platforms.
• Consideration of draft law No. 15112-d on taxation of international postal shipments.
• Amendments to legislation governing the National Energy and Utilities Regulatory Commission (NEURC) to strengthen its independence.
• Appointment of new members to the Accounting Chamber.

However, on September 1, 2023, the parliament declined to approve the appointment of new Accounting Chamber members. Pidlas noted that while passing these bills before year-end is important, it is not an absolute prerequisite.

It is important to highlight that no delays are anticipated from the Cabinet of Ministers or other government bodies in meeting their obligations, offering some optimism for continued progress in IMF negotiations. Ukrainian Prime Minister Serhiy Koretsky recently held his first international phone call with Dan Katz, the IMF’s First Deputy Managing Director, during which preparations for the Extended Fund Facility (EFF) review were discussed. Approval of the EFF program could unlock access to an additional $690 million in IMF funding.

Roksolana Pidlas warned that delays in adopting vital legislative initiatives put Ukraine’s next IMF tranche in jeopardy.

This scenario highlights the critical role political stability and effective parliamentary action play in securing international financial aid amid Ukraine’s ongoing economic challenges. Meeting commitments to the IMF remains a vital step for Ukraine to access external resources that can help stabilize the nation’s economy.