IMF disburses £720m to Ukraine, signalling end to conflict in optimism

The executive board of the International Monetary Fund (IMF) agreed on Friday to disburse £720 million in budget support for Ukraine. These funds come from a £12.7 billion loan program, the IMF announced. This brings the total disbursements to £4.4 billion.

In a press release about the disbursement of another aid tranche, the IMF informed that Ukraine continues to face significant risks, especially due to the ongoing war. However, IMF's mission chief for Ukraine, Gavin Gray, stated in an interview with journalists that the Fund expects the conflict will be moving towards an end in 2024 - reported Reuters.

According to him, the funds approved on Thursday should reach Ukraine in the coming days. Reuters assessed that this is good news, especially since there is still an ongoing debate in the United States Congress over an additional aid package totalling £50 billion.

In a statement, the IMF conveyed that the Ukrainian economy in 2023 continues to demonstrate "exceptional resilience". However, adverse factors related to the war are re-emerging, and GDP growth rate is expected to drop to 3-4% in 2024. The Fund believes that further reforms will be crucial to lower risks, support growth, and pave the way to European Union membership.

Looking forward, an economic recovery is expected to slow down a bit, given the exceptionally high risk in the outlook, mainly stemming from the exceptionally high uncertainty related to the war, as well as potential delays in external financing - assessed the IMF's Managing Director Kristalina Georgieva in the statement.

A few days earlier, the EU increased its support for the Ukrainian armed forces by an additional £4.3 billion. These funds will be allocated to Ukraine as part of a special support fund.