IMF launches Ukraine loan review that could unlock $1.67 billion

KYIV: The International Monetary Fund began a review of Ukraine’s lending programme on Monday that could unlock $1.67 billion in fresh financing for Kyiv as it struggles to shore up its war-hit economy and plug a looming funding gap.

Cooperation with the IMF, Ukraine’s key international lender, is critical to ensure funding from other partners and help maintain economic stability as the conflict with Russia grinds on and Kyiv faces a multi-billion financing shortfall for next year.

“Discussions will cover macroeconomic and fiscal policies, as well as key structural reforms,” Priscilla Toffano, IMF’s resident representative in Ukraine, said in a statement.

The review combines the second and third assessments of Ukraine’s four-year IMF programme, potentially clearing the way for the disbursement of about $1.67 billion.

Prime Minister Sergii Koretskyi said the meetings would also cover the budget and international financial aid for 2027.

Ukraine’s economy, battered by more than four years of war, is now in one of its most challenging periods due to intensified Russian air bombardments on businesses, energy infrastructure and revenue-generating sectors.

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The economy slipped into contraction this year, with the gross domestic product down by 0.7% year-on-year in the third quarter. The central bank expects GDP to slip by 0.4% in 2026. Inflation is on the rise, and expected to reach 12.5% this year.

As exports via the Black Sea ports are blocked and main exporting sectors — agribusiness and the steel industry — are crippled, the budget revenues are also falling below the plan.

The country faces a massive funding gap of about $70 billion next year, Ukrainian officials have said.

The central bank said that the IMF’s team and Ukrainian officials would hold meetings in Lviv and Warsaw with some experts joining the talks online.