The Executive Board of the International Monetary Fund has completed the third review of the Extended Fund Facility (EFF) program for Ukraine and approved the allocation of the fourth tranche of approximately $880 million (SDR663.9 million), which will be used to support the budget.

"The authorities continue to perform strongly under the EFF under challenging conditions, meeting all but one quantitative performance criteria for end-December, all structural benchmarks through end-February, and all indicative targets," the report says.

As the chief of the IMF mission to Ukraine clarified at a briefing, the receipt of funds in Ukraine is expected within 2-3 days.

"The Ukrainian economy continued to show remarkable resilience in 2023, although war-related headwinds are re-emerging, and the outlook remains subject to exceptionally high uncertainty. Sustained reform momentum is necessary to safeguard macroeconomic stability, restore fiscal and debt sustainability, enhance institutional reforms, and lay the groundwork for reconstruction efforts and the path to European Union (EU) accession," the IMF said.

"The economy was more resilient than expected in 2023, with robust growth outturns, continued sharp disinflation, and the maintenance of adequate reserves. However, headwinds are re-emerging in 2024, with growth expected to soften to 3-4% due to uncertainty about the ongoing war and as supply constraints become more binding. The outlook remains subject to exceptionally high downside risks arising from war-related factors, potential shortfalls in external financing and the socio-economic impact of policies that may be required if shocks materialize," the fund added.

"The authorities should be vigilant against these risks. It is also critical that the external financing committed to Ukraine by all donors is disbursed in a timely and predictable manner to safeguard Ukraine’s hard-won macroeconomic stability," Managing Director of the IMF Kristalina Georgieva said.

"External disbursements on appropriate concessional terms, together with strong domestic resource mobilization are necessary for Ukraine to meet its financing needs and secure fiscal and debt sustainability. Stronger revenue mobilization, underpinned by the recently approved National Revenue Strategy, while avoiding measures that erode the tax base, will be critical to secure fiscal sustainability. Reforms to further strengthen the frameworks for medium-term budget preparation, fiscal risks and transparency, and public investment management should advance in support of these goals," she said.

“The recent shift to a managed exchange rate regime has been an important step toward normalizing monetary and exchange rate policies, and increased exchange rate flexibility will help strengthen the resilience of the economy to external shocks. Moreover, continued disinflation and well-anchored inflation expectations and FX cash market stability support further easing in monetary policy. A gradual approach to the easing of FX controls, consistent with the National Bank of Ukraine’s strategy, will be essential to safeguard FX reserves. The authorities’ efforts to avoid monetary financing should continue," she noted.

“Steadfast reform momentum to enhance anti-corruption and governance frameworks, including ensuring the effectiveness of anticorruption institutions, will be essential to help contain fiscal risks, enhance growth and support the path to EU accession,” she added.