Kyiv, September 9, 2014. The Ukrainian government remains largely committed to reforming the economy and rooting out corruption. This was stated by Jerome Vacher, the IMF Resident Representative for Ukraine, at Ukraine Crisis Media Center in Kyiv.
On August 29, the International Monetary Fund approved a second tranche of financial assistance to Ukraine, and expects a total of 2.7 billion USD of financial assistance to be delivered by the end of 2014, according to the published and tentative schedule of IMF board reviews. The IMF will continue to review Ukraine’s commitment to reform, and recently published its staff report for the first review of the program on its website that provides information on Ukraine’s economic forecasts and expected policies, as well as a diagnostic study on anti corruption, the business environment and judicial reform soon to be translated into Ukrainian. Despite current problems facing Ukraine, particularly the unrest in eastern Ukraine, the IMF expects and encourages the Ukrainian government to press ahead with promised reforms.
An IMF mission came to Ukraine in July to assess the country’s readiness to press ahead with necessary reforms, and the published report provides insight to both recent reform efforts and forecasts on the Ukrainian economy. “We saw some strong commitment from the authorities” and “despite some slippages, we still see a strong commitment,” said Vacher. The review, like future reviews, gauge the progress made by state authorities and strong commitment of Ukrainian society to making changes.
Ukraine’s primary challenge is the country’s near-term economic prospects and the burden that the conflict in the east places on the economy, Vacher stated. The conflict “has implications for the evolution of the economy in particular on GDP, and investment.” Ukraine’s GDP is expected to contract 6.5 percent by the end of 2014, and the evolution of the conflict continues to complicate forecasts of Ukraine’s economy and attendant risks. The IMF is mindful of these challenges, and will continue to reassess the situation and how it might impact policy recommendations and the lending program. The IMF has presented illustrative scenariosn of different risks in Ukraine, which designed to portray the “impact of continued tensions, and the impact on the fiscal situation, the monetary situation, and the impact on reserves,” Vacher said.
Vacher stated that the IMF is well aware of the challenges facing authorities in Kyiv, but cautioned that the IMF fully expects Ukraine to continue its dedication to the reform agenda. “We are well aware of the current difficulties,” but “it should also be taken as an opportunity to conduct and strengthen reforms,” he said. The IMF will continue to work in close cooperation with the government and the National Bank of Ukraine on policy recommendations.