IMF approves $15.6 billion loan for Ukraine

(Patria) - The International Monetary Fund (IMF) Executive Board yesterday approved a four-year financial package for Ukraine worth $15.6 billion as part of an international support package totaling $115 billion, in the second year of the Russian invasion, the IMF announced.

This decision is expected to mobilize large-scale concessional financing from Ukraine's international donors and partners to help address Ukraine's balance of payments problem, achieve medium-term external sustainability, and restore debt sustainability, the statement said.

"The new Extended Fund Facility (EFF) will allow for an immediate disbursement of approximately $2.7 billion to Ukraine," it added.

The IMF Board thus ratified the agreement reached on March 21 after months of negotiations between IMF officials and Ukrainian authorities.

The EFF is the first major financial program approved by the IMF for a country affected by a large-scale war. The previous IMF program for Ukraine of $5 billion expired last year.

"The economic and social impact of the Russian invasion of Ukraine is devastating," said First Deputy Managing Director Gita Gopinath.

Ukrainian President Volodymyr Zelenskyy welcomed the IMF's decision on Twitter.

"This is a great help in our fight against Russian aggression. Together we will support the Ukrainian economy. We are moving towards victory," he wrote.

The $115 billion financial package includes the IMF loan, $80 billion in aid and loans from other countries, and debt forgiveness of up to $20 billion.

"The IMF expects Ukraine's real GDP in 2023 to be between -3 percent and +1 percent," he said.