Ukraine MinFin remains positive about IMF tranche this year

Ukraine’s Finance Minister Oleksandr Danyliuk said on
Oct. 13 his government is closer to completing the fourth review under the EFF
program with IMF, the dt.ua news site reported the same day. “I estimate
receiving the tranche this year,” he said during a visit to Washington.
Ukraine’s parliament has already approved pension reform, a key IMF
requirement, he said. The next step is a law to simplify privatization, which
can be approved this week. The third important step would be the approval of
legislation to create an independent anti-corruption court in Ukraine, Danyliuk
said.

In other news, Finance Minister said on Oct. 15 that
Ukraine reached some progress in talks with the IMF to avoid hiking natural gas
prices for households, Interfax-Ukraine reported. Danyliuk clarified that no
final solution has been reached so far. Recall, Ukraine is seeking to amend its decree on gas pricingfor households in October 2017-April 2018, which was approved in March 2017 to
meet IMF requirements.

Alexander Paraschiy: Indeed the
IMF has several other requirements of Ukraine not mentioned by Danyliuk in his
comments this weekend, including approval of the 2018 state budget with a
deficit of no more than 2.5% (which is very likely) and the selection of a new
head of Ukraine’s central bank (which can be done this month). Since the
president seems to be willing to support the creation of an independent anti-corruption
court (which he resisted earlier), it looks like resolving the gas pricing
issue is now the main impediment.

So far, we share Danyliuk’s optimism about Ukraine
getting its second IMF tranche this year (out of four total tranches granted so
far by the EFF program), expecting it will be USD 1 bln instead of the USD 1.9
bln that was scheduled.