IMF mission leaves Ukraine with critical concluding statement

The IMF mission concluded its visit to Ukraine on May 26 and released an official statement on the IMF web site. The head of the mission, Ron van Rooden, stated that “discussions were focused on the pending pension and land reform and on measures to speed up the privatization process and ensure concrete results in anticorruption efforts.” Further work is needed to make pending legislation “meet the reform objectives… Securing parliamentary approval of these draft laws will be needed to pave the way for the completion of the fourth review,” van Rooden stated.

In April, the IMF approved the USD 1.0 bln fourth wire disbursement for Ukraine under the USD 17.5 bln Extended Fund Facility program. The revised memorandum required pension reform by end-April, land reform by end-May, anti-corruption court by mid-June, a privatization law and completed triage for all state owned enterprises by end-August.

Alexander Paraschiy:  This conclusion looks disturbing. It means the IMF officials did not approve the pension reform that Prime-minister Volodymyr Groysman presented. And the idea to ‘modernize’ pensions from October (i.e. increase them) seems to be the main reason for the negative reaction. All other issues, like land reform, are still in the pipeline and we do not have a clear view as to when they might be realistically finalized. Such developments mean that the fourth review most likely will be delayed until autumn. Parliament goes on vacation in mid-July and we are skeptical about MPs efficiently reviewing and approving all the needed legislation by that time.