IMF, Ukraine Reach Staff-Level Agreement on New $8.1bn Extended Fund Facility to Address Massive War-Time Financing Gaps
An International Monetary Fund (IMF) mission led by Gavin Gray has concluded discussions with the Ukrainian authorities on a new multi-year support programme, reaching a staff-level agreement on a 48-month Extended Fund Facility (EFF) Arrangement. The prospective facility, with potential access of SDR 5.94 billion (approximately US$8.1 billion), will help anchor Ukraine’s macroeconomic framework and mobilise substantial external financing amid the ongoing war.
In a statement released at the end of the November 17–21 mission, Mr. Gray noted that the agreement outlines a series of fiscal, monetary, and structural policy commitments aimed at maintaining macroeconomic stability, restoring debt sustainability, tackling corruption, and strengthening governance. The programme is expected to play a catalytic role in securing large-scale international support to meet Ukraine’s widening financing needs.
Financing Gap Estimated at US$136.5bn
Under the baseline scenario, Ukraine faces an estimated financing gap of US$136.5 billion over 2026–2029. For 2026–2027 alone, the residual gap—after accounting for currently committed support—stands at roughly US$63 billion. The IMF stressed that donor support on timely and concessional terms will be critical to preventing liquidity pressures.
“The IMF welcomes all efforts to secure a durable peace, and the program will be recalibrated as needed at each review depending on progress towards a resolution of the war,” Mr. Gray stated.
Authorities Seek Strong Anchor for Medium-Term Strategy
Following eight successful reviews under Ukraine’s previous IMF programme, authorities believe the new EFF will reinforce their medium-term reform agenda and help mobilise external financing. Despite renewed attacks on energy and critical infrastructure, the economy continues to demonstrate resilience, though risks remain “exceptionally high” given the uncertainty surrounding the war and donor funding levels.
Fiscal Priorities: Revenue Mobilisation, Spending Discipline, and Debt Strategy
Enactment of a 2026 budget aligned with programme objectives is described as “imperative,” with the authorities urged to avoid inefficient spending and new tax exemptions. Commitments include:
Implementing domestic revenue measures, including taxation of digital platform income
Closing customs loopholes on consumer goods imports
Ending exemptions for VAT registration
Accelerating efforts to curb tax evasion and expand the tax base
Advancing debt restructuring to restore debt sustainability
Large-scale donor financing on grant-like terms is expected to remain essential.
Monetary Policy and Exchange Rate Flexibility
The National Bank of Ukraine (NBU) remains committed to disinflation, with a medium-term target of reducing inflation to 5 percent. The Fund supports the NBU’s plans to increase exchange rate flexibility, enabling the currency to better absorb external shocks while preserving adequate foreign exchange reserves.
Governance, Anticorruption and SOE Reform
The IMF placed strong emphasis on governance reforms, highlighting the urgency of addressing corruption vulnerabilities. Key areas include:
Preserving the independence and resources of anti-corruption institutions
Reforming the State Tax Service (STS) and State Customs Service (SCS)
Appointing a new SCS head and upgrading IT systems
Enhancing public procurement transparency
Reforming financial planning, reporting, and audit systems across state-owned enterprises
Strengthening nomination procedures for SOEs and state-owned banks
The measures are deemed essential for restoring public trust and preparing for eventual reconstruction.
High-Level Engagement
The IMF mission held discussions with Prime Minister Yulia Svyrydenko, Finance Minister Serhiy Marchenko, NBU Governor Andriy Pyshnyy, senior officials, and civil society representatives. Mr. Gray expressed appreciation for the authorities’ cooperation and constructive engagement.
The staff-level agreement is subject to approval by IMF Management and the Executive Board. If approved, the arrangement will provide critical policy anchoring and financial backing as Ukraine continues to manage the economic fallout of the war.
