IMF to analyze Ukrainian economy this autumn

A mission from the International Monetary Fund (IMF), in accordance with the rules envisaged by the organization's statute, will analyze this autumn the macroeconomic situation in Ukraine, the talks with which about a new loan stalled.

Deputy Spokesman at the IMF External Relations Department William Murray said this at a briefing on July 25, Reuters reported.

He recalled that Ukraine, which should make a record payment of about $9 billion under its foreign debts in 2013, including about $5.7 billion under IMF loans, asked the IMF for new financing. The fund twice sent a mission to Kyiv to negotiate the terms of loans as part of the stand-by program for about $15 billion.

In early April 2013, the IMF mission completed in Kyiv the next round of discussions with the government, promising to continue "in the coming weeks" the negotiations on a new loan, setting unpopular reforms in the economy as the necessary condition. "But there have been no in-depth discussions of such a program at the policy level since April," Murray said.

He said that the key creditor was preparing to send a mission to Ukraine under Article IV of the statute, which provides for regular consultations on budgetary and monetary policies of the government members of the fund. "That mission is expected to happen sometime in the autumn," Murray said. He also added that in November, the fund's executive board would discuss the challenges that are facing Ukraine before the end of 2013.

As reported, in 2011, the IMF froze loans to Ukraine under the previous stand-by program since the Ukrainian authorities refused to meet its commitment to increase gas tariffs for households and municipal sector. The fund believes that owing to this Ukraine will be able to reduce its budget deficit and improve the financial situation at Naftogaz of Ukraine, which imports natural gas from Russia at a price several times higher than tariffs for households. However, Ukrainian analysts believe that President Viktor Yanukovych, who wants to run for a second five-year term, will not resort to an increase in tariffs with one-and-a-half years remaining before the next presidential elections.

Adapted from ukrinform


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