Ukrainians hear reports on programs of cooperation with the IMF. They state that the fund can provide another loan. But what to rejoice? We asking again and again and they are giving something with the new conditions. The first tranche in the amount of $ 1.9 billion is forecasted. But already in the first quarter of 2020, the National Bank and the government paid the main sum - $ 545 million; as well as interest - $ 75 million. Payments by the end of 2020 - the main amount – will consist $ 545 million, anf interest will be $ 200 million.
One can rejoice when production begins, budget revenues increase, new hospitals, bridges, roads, factories are being build! And here they just give us a loan!
First of all, I note that I stand for the continuation of constructive cooperation with the IMF, taking into account the features and nature of the development of economic relations in Ukraine.
For the period 2014-2020. Ukraine was in three IMF programs (Standby (SBA) - in 2014-2015 and in 2018-2019 and Extended Financing (EFF) - in 2015-2018).
Under the relevant programs, the IMF loan funds amounted to 39%, including:
under the SBA program (2014-2015) - 27% (2 tranches out of 9 were received) - the program was completed ahead of schedule at the initiative of the Ukrainian side in connection with the transition to EFF;
under the EFF program (2015-2018) - 50% (4 tranches from 16 were received);
under the SBA program (2018-2019) - 36% (1 tranche of 3 was received).
In addition, the amount of commission paid by the National Bank in favor of the IMF for unused loans in terms of hryvnias at the exchange rate at the time of settlement:
Failure to agree on a new expanded financing program could lead to net payments from the National Bank to the IMF at the level of $ 3 billion in 2020-2021. This could deepen the country's financial deficit and economic crisis, despite the downward trend in foreign direct investment in Ukraine.
Since 2014 (as of the end of the 1st quarter of 2020), net income from IMF loans (including repayments under preliminary programs) amounted to $ 4.3 billion.
The volume of planned payments on IMF loans (repayment and servicing) in 2020 will amount to $ 1.4 billion, in 2021 - $ 1.6 billion.
The prerequisite of the program of cooperation with the IMF was the implementation of structural and institutional reforms aimed at increasing the investment ability of Ukraine. At the same time, the limited and selective measures taken, military operations and other factors had a negative impact on Ukraine's investment attractiveness.
The result of this was the preservation of low foreign direct investment inflows into the economy during 2015-2019, which for this period averaged $ 2.7 billion over the year - about 1.8% of GDP (excluding reinvested income - only 2, 5 billion dollars), which is more than twice less than the average for 2008-2013 (6.4 billion dollars), and have a tendency to further decline.
Let’s talk on payments to the IMF. In the first quarter of 2020, the National Bank and the government paid the principal amount - $ 545 million; interest - $ 75 million. Payments by the end of 2020 - the main amount - $ 545 million, interest - $ 200 million; in 2021 - the main amount - $ 1,340 million; interest - 220 million dollars.
That is, in the first quarter of 2020, payments to the IMF exceeded foreign direct investment in the economy.