IMF: There are signs of recovery, but growth will not be easy to achieve

Representatives of the Fund were in Ukraine from November 3 to 17
16:43, 18 November 2016

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The mission of the International Monetary Fund, which was in Ukraine from November 3 to 17 to discuss the third review of the expanded program funding (EFF), headed by Ron van Ruden, and summed up the results of the work. It is stated in the report of the Mission, who worked in Ukraine on November 3-17.

“The mission held constructive discussions with the authorities on policies needed to complete the third review under the EFF arrangement. While good progress has been made, the authorities need some more time to implement policies to ensure medium-term fiscal sustainability—including adoption of the 2017 budget consistent with program targets—safeguard financial stability, and tackle corruption. Discussions on these policies will continue in the period ahead”, reads the report.

Related: IMF mission to complete work in Kyiv by Monday

According to the IMF statement, after a difficult period, the Ukrainian economy is showing welcome signs of recovery. Decisive policy actions in the past two years have led to a dramatic reduction in external and internal imbalances. Inflation has been successfully brought down, the central bank’s international reserves have increased substantially, and growth is expected to reach 1½ percent in 2016 and pick up to about 2½ percent in 2017. The strength and durability of the recovery, however, depend crucially on the implementation of ambitious reforms to support Ukraine’s transition to a full-fledged market economy.

Related: National Bank: Ukraine might not get another IMF loan by late 2016

“Turning the current stabilization into strong and sustainable growth—so that Ukraine can catch up with its regional peers—will not be an easy task. This has been a challenge in the past, when stop-and-go reforms resulted in the repeated buildup of large imbalances and economic crises. The authorities should remain united in their determination to continue to advance reforms, resisting populist pressures and overcoming opposition from vested interests. Decisive steps particularly need to be taken to fight corruption, which remains the most frequently mentioned obstacle to doing business in Ukraine. While there has been progress in setting up new institutions, including the National Anticorruption Bureau of Ukraine, and the publication of high-level officials’ asset declarations was a major step, tangible results in prosecuting and convicting corrupt high-level officials and recovering proceeds from corruption have yet to be achieved”, stressed in the IMF.

Related: IMF emphasizes Ukraine’s progress

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