Ukraine has failed to meet the key structural benchmark required for the seventh review of the IMF program, and has also missed the deadlines for three benchmarks of the upcoming eighth review. This was reported by the #RRR4U consortium members during the presentation of the 13th edition of the Monitoring of the IMF and EU assistance conditions under the Ukraine Facility.
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As noted, according to the Ukraine Facility plan, the country also risks not meeting nine indicators at once for the first quarter.
Which beacons are not implemented
On March 28, the IMF Executive Board approved the seventh revision of the Program for Ukraine. A mandatory precondition for this was the signing of a law on increasing excise taxes on tobacco products, which occurred with a delay of several months and resulted in a budget shortfall of more than UAH 2 billion.
At the same time, the deadline for the implementation of the beacon on the complete cancellation of the “Lozovoy amendments” was postponed (we are talking about changes to the Criminal Procedure Code on establishing the period of pre-trial investigation, closing criminal proceedings upon expiration of this period and the procedure for its extension).
“Ukraine has failed to fulfill one of its obligations – it has not cancelled the “Lozovoy amendments”, which it was supposed to cancel for the successful seventh review. The fact that Ukraine managed to reach an agreement on the review at the expert level on this issue means that the IMF is again meeting us halfway, showing a certain flexibility,” said the economist at the Center for Economic Strategy.
Read: IMF Updates Structural Beacons for Ukraine
The IMF reduced the size of the next tranche from $900 million to $400 million at the request of the Ukrainian Ministry of Finance.
“In 2025, we have a better situation with external financing of the budget deficit, primarily due to the ERA program – financing from income from frozen Russian assets. Therefore, Ukraine asked that we receive a little more financing in 2026-2027,” Samoiluk explained.
The next eighth program review, when the IMF will check whether the end-March benchmarks have been met, could also prove problematic.
“Of the five beacons that the Fund will assess, we have completed only two in full and on time. Three more have not been completed: the appointment of the head of the Bureau of Economic Security (the competition is ongoing), approval of the external audit of NABU and preparation of a strategy for the National Securities and Stock Market Commission. The progress cannot be called satisfactory,” Samoiluk noted.
During the review, the IMF postponed the implementation of the relevant benchmarks, which makes the eighth review of the Program more likely.
Ukraine Facility
In parallel, Ukraine is working on a reform program with the EU. According to DiXi Group project expert Alena Korogod, Ukraine has already encountered problems with fulfilling its obligations under the Ukraine Facility for the first quarter.
“By the end of March, Ukraine must fulfill 16 indicators. As of March 27, only seven had been fulfilled. Another nine indicators remained unfulfilled,” the expert noted.
Read: Ukraine received another 3.5 billion euros from the EU
Let us recall that in mid-March, the Council of the European Union approved 3.5 billion euros for Ukraine (of which 400 million euros are grants) for fulfilling the indicators of the fourth quarter of 2024. In total, Ukraine expects 12.5 billion euros from the EU in 2025.
For reference
RRR4U (Resilience, Reconstruction and Relief for Ukraine) is a consortium of four Ukrainian civil society organizations: the Center for Economic Strategy, the Institute for Economic Research and Policy Consulting, the Institute for Analytics and Advocacy, and DiXi Group.
- IMF