Ukraine’s economic outlook remains exceptionally uncertain, IMF says

WASHINGTON: Ukraine is continuing to make good progress in implementing structural reforms, but its economic outlook remains exceptionally uncertain given its ongoing war against Russia’s invasion, the International Monetary Fund said on Thursday.

IMF spokesperson Julie Kozack said the war was taking a heavy toll on Ukraine’s people, economy and infrastructure, although the country had shown continued resilience since Russia’s 2022 invasion.

The IMF last month forecast Ukraine’s gross domestic product growth would ease to between 2% and 3% in 2025 from an estimated 3.5% in 2024, reflecting headwinds from labor constraints, damage to energy infrastructure, and the ongoing war.

Ukraine economy heads for tough 2024 as Western aid concerns grow

She said it was premature to assess the impact of recent U.S. moves to halt aid to Ukraine or an eventual ceasefire on the country’s economy, but the IMF was keeping a close eye on those developments. The same was true for Russia, she said.

IMF staff on February 28 reached agreement with Ukrainian authorities on the seventh review of Ukraine’s $15.5 billion Extended Fund Facility (EFF) program, paving the way for the release of $400 million once approved by the IMF’s board. That would bring total disbursements under the program to about $10.1 billion.

The disbursement is lower than the roughly $900 million that was initially expected, but reflected an adjustment in Ukraine’s balance of payments needs, Kozack said, adding that changes in disbursement levels were not unusual over the life of a program.