Zelensky discusses with IMF possible higher financing

Ukrainian President Volodymyr Zelensky had a phone
call with IMF Managing Director Kristalina Georgieva on Mar. 22 discussing the
situation in Ukraine and future cooperation with the fund, the president’s
website reported the same day. “We discussed an increase in the amount of
support for Ukraine from the IMF in a time of big challenges for the economy
related to the global pandemic. Ukraine is aware that today it is vital to act
proactively and quickly,” Zelensky said.

They also agreed to coordinate their efforts to widen
the support for Ukraine from its international partners, the president’s
website reported. “I had a very constructive conversation with President
Zelensky today, and expressed our support for Ukraine as the country confronts
the tremendous challenges caused by COVID-19,” Georgieva tweeted the same day.

Alexander Paraschiy: Ukraine
faces a tough repayment schedule of international debt as it has to pay about
USD 4.1 bln to the IMF and other creditors by the year’s end. As refinancing on
private markets is not available, the only source of funds to cover the
repayments is bilateral and multilateral official financing, which Ukraine has
yet to secure.

IMF tranches under the EFF and, perhaps, other
programs – as well as the already agreed upon financing from the EU – will
cover most of Ukraine’s refinancing needs, but it’s very unlikely to cover
everything. Therefore, IMF support on securing additional sources of financing
is critical for Ukraine.

On top of that, the country faces a large budget
deficit, which was planned at the level of about UAH 90 bln (USD 3.3 bln) but
will have to be enlarged by at least double due to the coronavirus trouble.
Some of this deficit could be covered by internal sources, so additional
external support to cover the deficit would be valuable.