IMF has set 12 additional requirements for Ukraine

IMF has disclosed an updated memorandum on economic and financial policies within the framework of the second review of the credit program. Ukraine has committed to fulfilling 12 additional requirements.

From the previous demands necessary for the second review, Ukraine has met 11, albeit with a delay in four.

One of the benchmarks — the creation of a conceptual note on the “5-7-9” program with suggestions to limit it solely to small and medium-sized companies — Ukraine did not fulfill, postponing it to the end of March.

By the year-end, there remain three “old” benchmarks:

• Review of current procedures governing state investments.
• Approval of the National Income Strategy.
• Adoption of legislation to enhance the institutional independence of the Specialized Anti-Corruption Prosecutor’s Office (SAP).

Another “old” benchmark — preparation of banking reform fundamentals in consultations with the DGF and IMF experts — was postponed from the end of March 2024 to the end of December 2024, while the benchmark of “introducing a risk assessment methodology in supervision” remains at the end of June.

Added to these benchmarks are:

• Finding sources to increase own budget revenues by 0.5% of GDP by the end of February.
• Amendments to the Criminal Procedure Code regarding the consideration of cases by the High Anti-Corruption Court (HACC) by a single judge or a panel of three judges by the end of March.
• Adoption of a law on the reboot of the Bureau of Economic Security by the end of June.
• Conducting an external audit of the financial status of Teplokomunenergo companies, breaking down debts before and after February 2022 by the end of June.
• Auditing the effectiveness of tax privileges and losses incurred by them by the end of July.
• Adoption of a law to establish a new court for cases against state bodies – NBU, NABU, NAPC by the end of July.
• Development of a state property policy for state-owned enterprises, dividend policy, and privatization strategy by the end of August.
• Identifying the most affected state companies by the war and preparing an assessment of potential fiscal and quasi-fiscal risks by the end of September.
• Conducting an external audit of NABU’s efficiency by the end of September.
• Conducting a diagnostic review of the pre-war medium-term budget process with the IMF’s assistance to strengthen the budget’s strategic approach by the end of October.
• Adoption of a resolution with an action plan that establishes a clear link between medium-term budget planning and capital expenditures and designates the Ministry of Finance responsible for oversight by the end of December.
• Retaining all state banks under the Ministry of Finance’s management, transferring all nationalized non-systemic banks to the Deposit Guarantee Fund (a permanent benchmark).

On December 11, the IMF approved the third tranche of $900 million within the $15.6 billion credit program for Ukraine. This program aims to support fiscal, external, price, and financial stability, aid economic recovery, and strengthen institutions to facilitate long-term growth amid Ukraine’s recovery and its prospective EU accession.