J.P. Morgan predicts Ukraine to get $3 bln of official funding by late 2021
JPMorgan analysts predict that Ukraine will receive $3 billion by the end of 2021, as well as an increase in international reserves to $32.5 billion thanks to the excess of foreign exchange inflow over its outflow, growth of foreign exchange reserves by $0.6 billion and additional issue of SDRs by $2.7 billion from the IMF.
In the bank's regional periodic report released this week, the experts expect the second tranche of the IMF loan to arrive by September this year.
The experts said that the president and the government of the country are interested in meeting all the necessary conditions of the IMF as soon as possible to receive a tranche before the beginning of autumn, when the budget for 2022 will be discussed. At the same time, they estimate the risk that the laws required for the tranche will not be adopted before the summer break and cooperation with the IMF may resume only at the end of this year or next at 20-30%.
According to the report, there is no progress in the adoption of anti-corruption and judicial legislation required under the terms of the Stand-By Arrangement, but the situation is expected to change by the end of June.
The analysts at JPMorgan, in particular, said that last week parliament passed an amendment to punish false e-declaration, but the document was criticized by the National Agency on Corruption Prevention, mainly due to several amendments that allow civil servants not to declare assets owned by their family members. In their opinion, such criticism is a negative signal for cooperation with the IMF, at the same time, the veto of Ukrainian President Volodymyr Zelensky instills confidence in the support of anti-corruption initiatives by the head of state.
As reported, Ukraine's international reserves as of June 1, 2021 amounted to $27.84 billion, compared with $29.11 billion at the beginning of this year.