Ukraine, IMF to continue discussions in comings days to finalize staff-level agreement

The International Monetary Fund (IMF) mission will continue discussions in the comings days to finalize a staff-level agreement, the IMF mission said in a press release.

"The mission held constructive discussions with the authorities on policies needed to complete the first review under the EFF arrangement. Understandings were reached on most issues and discussions will continue in the comings days to finalize a staff-level agreement than can be taken for approval to the IMF management and the Executive Board," reads the press release, citing Nikolay Gueorguiev, mission chief for Ukraine.

He said that all performance criteria for end-March were met and all structural benchmarks due in the spring are on course to be met, albeit some with a delay.

"This good program implementation has been achieved notwithstanding an exceptionally difficult environment, in part related to the unresolved conflict in the East, which took a heavier than expected toll on the economy in the first quarter of 2015," Gueorguiev said.

He said that the Ukrainian authorities’ commitment to the reform program remains strong.

"The authorities recognize that decisive implementation of economic reforms is indispensable for entrenching financial stability and restoring robust and sustainable growth. They are committed to advancing fiscal consolidation and energy sector reforms, including further energy tariff adjustments to eliminate the large losses of Naftogaz, reduce energy consumption, and foster energy independence. They are also moving ahead with the rehabilitation of the banking system, and the improvement of the business environment to enhance the productive potential of the economy," he said.

"The authorities are also determined to complete the ongoing debt operation in line with program objectives. This will ensure that public debt is sustainable with high probability and the program remains fully financed, which are requirements for the completion of the review. More broadly, continued financial support for Ukraine’s reform efforts from official and private creditors is vital for the success of the program," Gueorguiev said.