IMF approves $0.5B tranche for Ukraine after successful program review

The International Monetary Fund (IMF) has approved the eighth review of its Extended Fund Facility (EFF) for Ukraine, unlocking a $0.5 billion disbursement to support the country's state budget, the National Bank of Ukraine announced Tuesday.

The decision, made by the IMF Executive Board on June 30, raises total disbursements under the program to $10.6 billion, as Ukraine continues to battle the economic fallout of the war with Russia.

"The program's performance remains strong," the IMF said in a statement, noting that Ukraine had met all quantitative targets through March and implemented key reform measures.

While the timing of future disbursements in 2025 has been adjusted, the total size of the program remains at $15.5 billion.

IMF First Deputy Managing Director Gita Gopinath acknowledged the devastating toll of the war but praised Ukraine's ability to preserve macroeconomic stability through strong domestic policies and international support.

Ukraine's economic growth forecast for 2025 remains at 2-3%, though the IMF warned of continued high risks. The Fund also recommended tightening monetary policy if inflation expectations deteriorate, while commending the central bank's existing approach.

The IMF called for further reforms, including a supplementary budget, tax reforms aligned with EU standards, and continued progress in external debt restructuring, especially concerning the country's Eurobond strategy.

The program's total external support is estimated at $153 billion under the baseline scenario, and $165 billion under a downside scenario, with $50 billion to come from G7-backed ERA loans secured by frozen Russian assets.

"We have been waiting for this positive news from Washington," said Andriy Pyshny, head of Ukraine's central bank.

"Each successful review is not only about financing, but about trust, sustainability of reforms and the effectiveness of our cooperation with the IMF," he added.