IMF agrees to Ukraine requests to stagger gas tariff increase

The International Monetary Fund issued a statement yesterday at the conclusion of its mission’s visit to Ukraine as part of the second review of Ukraine’s 2.5-year USD 15.3 bln stand-by agreement. Thanos Arvanitis, chief of the mission, said the two sides to agree to a more gradual schedule for gas tariff increases, vs. another 50% hike as of April 15 as envisioned at the conclusion of the first program review (following a 50% raise in August 2010). Arvanitis said offsetting budgetary measures were being identified to keep the combined (government and Naftogaz) deficit at 3.5% of GDP in 2011. Arvanitis said talks would continue in coming weeks before bringing the second review before the IMF’s executive board. The IMF green lit disbursal of a second USD 1.5 bln tranche in December 2010, which brought total disbursements under the program to USD 3.4 bln. According to the original schedule, the next USD 1.5 bln tranche is to be disbursed on March 15, 2011 (the whole amount is to go to the central bank).