IMF positively assesses Ukraine’s moves to preserve macro-financial stability

“The Russian invasion of Ukraine that started over seven months ago has caused tremendous human suffering and had a severe economic impact. Real gross domestic product (GDP) has contracted significantly, inflation has risen sharply, trade has been substantially disrupted, and the fiscal deficit has risen to unprecedented levels,” the statement reads.

Against this challenging backdrop, the discussions focused on recent macro-financial developments and outlook, the budget for 2023 and associated external financing needs, financial sector issues and the mix of policies to support macroeconomic stability, adds the report.

The Ukrainian authorities “deserve considerable credit for having maintained an important degree of macro-financial stability in these extremely difficult circumstances.”

“The authorities are encouraged to refrain from measures that erode tax revenues, as they strive to align expenditure with available financing,” the IMF said.

IMF staff and the authorities will advance work in the coming weeks to follow up on the government’s request for Program Monitoring with Board Involvement (PMB).

The PMB will lay out the authorities’ policy intentions to support macroeconomic and financial stability and present an assessment of external financing needs for 2023.

“As such, the PMB will also provide a strong anchor for macroeconomic policies, further catalyze donor support, and help pave the way toward a fully-fledged Fund program,” the statement concludes.

On Oct 17-20, Ukraine’s government officials, including NBU Governor Andriy Pyshnyi, were meeting with the IMF representatives in Vienna.