First IMF review of Ukraine loan facility paves way for $900 million payout

Kyiv’s Mayor Klitschko visits an apartment building, damaged during a Russian drone strike in Kyiv

VIENNA (Reuters) - An International Monetary Fund mission has completed its first review of a $15.6 billion loan programme for Ukraine and the country has met the required conditions, paving the way for a payout of around $900 million, the IMF said on Tuesday.

IMF staff have also raised their forecast for Ukraine's economic growth this year to a range entirely in positive territory from a previous prediction that was between -3% and +1%, the IMF said in a statement on the review of the four-year Extended Fund Facility (EFF) Arrangement approved in March.

"IMF staff and the Ukrainian authorities have reached staff-level agreement on the first review of the EFF. The agreement is subject to approval by the IMF Executive Board, with Board consideration expected in the coming weeks," the IMF said in its statement.

"All quantitative performance criteria for end-April and structural benchmarks through end-May were met."

The EFF is part of a $115 billion global package to support Ukraine's economy as it battles Russia's invasion.

To ensure continued IMF support, Ukraine must meet various conditions, including steps to boost tax revenue, maintain exchange rate stability, preserve central bank independence, and strengthen anti-corruption efforts.

The EFF is the first major conventional financing program approved by the IMF for a country involved in a large-scale war.

"A stronger recovery is expected as the economy progressively adapts to war conditions," the IMF said.

"IMF staff have therefore upgraded real GDP (gross domestic product) growth for 2023 to a range of 1 to 3 percent (from the previous range of -3 to +1 percent when the EFF was approved), although the outlook remains highly uncertain as the war continues."

(Reporting by Francois Murphy, editing by Mark Heinrich)