IMF approves $880 million aid for Ukraine, cites 'exceptional resilience'

The International Monetary Fund (IMF) Executive Board agreed on Friday to disburse $880 million in budget support for Ukraine, a part of a $15.6 billion loan program, the IMF announced. This recent disbursement brings the total funds released to $5.4 billion.

In a press release detailing this latest aid tranche, the IMF highlighted that Ukraine remains amid significant risks, chiefly due to the ongoing war. Despite these challenges, the IMF's mission chief for Ukraine, Gavin Gray, mentioned in an interview with journalists that the Fund is hopeful the conflict will wind down by 2024, as reported by Reuters.

Gray indicated that the approved funds on Thursday are expected to arrive in Ukraine shortly. This update is particularly timely, given the current debate in the United States Congress concerning an additional $61 billion aid package. Reuters noted this as positive news.

The IMF remarked that the Ukrainian economy has shown "exceptional resilience" in 2023. Despite this, it faces renewed challenges due to the war, with GDP growth likely dropping to 3-4% in 2024. The Fund emphasized the importance of continued reforms to mitigate risks, foster growth, and facilitate Ukraine's journey towards European Union membership.

Kristalina Georgieva, IMF's Managing Director, commented that the economic recovery might face a slowdown, mainly due to the heightened uncertainties from the war and potential delays in receiving external financing.

A few days before the IMF's announcement, the European Union pledged an extra €5 billion (about $5.4 billion) to aid the Ukrainian armed forces, funnelling these funds through a special support initiative.