IMF Welcomes Reforms in Ukraine
KYIV, Ukraine, July 10, 2012 /PRNewswire/ -- The Board of Directors of the International Monetary Fund (IMF) welcomed Ukraine's progress under the President's Economic Reform Plan and the achieved price stability in the country. Such statement was made in the summary of the Acting Chairman of the Board of Directors of the IMF David Lipton, following consultations with Ukraine, held in Washington, DC (USA) on June 29, 2012.
The IMF Executive Directors acknowledged the rebound in economic growth in Ukraine since the crisis of 2008-2009, as well as the decline in inflation and in the general government deficit. Directors also noted the authorities' efforts to advance several reforms, particularly the approval of the new pension law and the new Tax and Customs Codes.
According to the IMF website, Directors noted the progress Ukraine made in the banking sector. They recognized the plans to reduce banking system exposure to foreign exchange risks, including through limited sales to banks of foreign currency linked bonds issued by the government. Generally, IMF encouraged the Ukrainian authorities to press ahead with their efforts to unwind crisis era policies. IMF noted, however, that the country faces lingering vulnerabilities due to low reserve cover, energy sector strain on a budget, large external and fiscal funding needs, and the difficult external environment.
In conclusion, the report welcomed the Economic Reform Plan of the President of Ukraine, which aims at promoting growth, improving business climate, and attracting investment. Â Achieving these objectives, says the report, will require implementation of comprehensive structural reforms, including stronger governance and further privatization.
According to media reports, IMF accepts the possibility to resume lending to Ukraine within the framework of Stand By arrangement in the summer of 2012.
In case that happens, Ukraine may also count on the support from the World Bank. Earlier, on March 6, 2012 World Bank Vice President for the Europe and Central Asia Region Philippe Le Houerou stated: "We [the Board of the World Bank] recently approved the new Country Partnership Strategy (CPS) for Ukraine for 2012-2016, which promotes Ukraine's plan for conducting reforms."