IMF sees little progress in Ukraine’s commitments under SBA program

More progress from the Ukrainian side “is needed to
support completion of the first review” under the standby program with the IMF,
the funds’ key spokesman Gerry Rice told a press briefing on May 6. According
to Rice, the program aims at  safeguarding medium term fiscal
sustainability, preserving central bank independence, enhancing financial
stability, tackling corruption and strengthening governance.

Alexander Paraschiy: Ukraine
indeed made little attempt to implement its commitments to the IMF over the
last couple of months. The standby program terminates in early December, but
taking into account that fiscal sustainability is among the key priorities of
the fund, it is unlikely to provide any tranches to Ukraine since early
September, when the budgeting process for 2022 will start, and up until the
2022 budget is approved. All this means that Ukraine has to secure the nearest
tranche under the program by September, or more precisely, by late-July (before
the IMF board’s August recess).

To make this date realistic, Ukraine will have to
do all its homework by late June, so that it has enough time to pass the staff
review of the program and the board’s review by late July. That said, Ukraine
has only two months to fully meet its commitments under the program, otherwise
the current IMF program will fail. Thus far, such terms do not look
unrealistic, but the chances for Ukraine’s success in this do not look higher
than 50%.