IMF is ready to lend to Ukraine after state budget approval, spokesman says

The IMF expects to consider approving its next loan
tranche for Ukraine under a new stand-by program this year, soon after
parliament approves the 2019 state budget in full, IMF spokesman Gerry Rice
told a press briefing on Nov. 15. He did not clarify what size the tranche
could be this year. Recall, the IMF reported on Oct. 19 that it agreed at the
staff level to a new stand-by program with Ukraine for USD 3.9 bln.
The program’s start is conditional on the revision of natural gas rates for
residential consumers (implemented since Nov. 1) and full approval of the 2019
state budget with an affordable deficit.

Ukraine’s cabinet has submitted its draft of the 2019
budget for the parliament’s second reading on Nov. 14, with the budget deficit
planned at 2.3% of GDP, in line with IMF demands. Parliamentary Speaker Andriy
Parubiy said on Nov. 12 that law makers are scheduled to approve the budget on
Nov. 22, according to Interfax-Ukraine.

Alexander Paraschiy: If the
parliament indeed approves the 2019 budget on Nov. 22-23, this would be the
earliest approval in Ukraine’s history. So far, budget approval next week looks
realistic, taking into account that the next opportunity for a vote will only
emerge during the session week of Dec. 4-7. In the latter case, the IMF might
not have enough time to run all the formalities to provide Ukraine with its
loan tranche by the end of 2018.

We expect the loan will be disbursed this year, but
the key question is what will be its size. Earlier, the government estimated
the tranche to amount to USD 1.9 – 2.0 bln. Later on, the NBU deputy governor
revealed her expectation for about USD 1.5 – 1.9 bln. On the other hand, in its
recent Inflation Report, the NBU revealed its expectation for a USD 1.4 bln IMF
tranche this year.