IMF Completes Ukraine Fund Review, 2026 Article IV Talks

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the First Review of Ukraine's 48‑month Extended Fund Facility (EFF) arrangement. Completion of the Review allows for an immediate disbursement of SDR 503 million (about US$690 million), bringing total IMF disbursements under the arrangement to approximately SDR 1.6 billion (about US$2.2 billion). The Executive Board also completed the 2026 Article IV Consultation. ^[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.

Ukraine has maintained macroeconomic and financial stability despite Russia's continuing war, a more challenging external environment, and risks remaining exceptionally high. Prudent policymaking, strong engagement under the Fund-supported program, and substantial donor support have helped preserve stability under exceptionally difficult circumstances. Nevertheless, the economic outlook has weakened, mostly due to intensified attacks on critical infrastructure and adverse spillovers from the war in the Middle East.

Program performance has been broadly satisfactory. All end-March quantitative performance criteria and indicative targets were met, but the end-June target on net international reserves was missed, partly due to the impact of the war in the Middle East. Reform implementation has slowed, with several structural benchmarks completed with a delay or missed. The authorities have agreed to corrective actions and revised timelines for key reforms, while reaffirming their commitments to the program's fiscal, governance, anti-corruption, energy-sector, and financial-sector objectives.

The 2026 Article IV Consultation highlighted the importance of preserving macroeconomic stability while advancing reforms critical for post-war recovery and long-term growth. Key priorities include reducing informality, strengthening domestic revenue mobilization-particularly by tackling tax evasion and avoidance, improving the investment climate, enhancing governance and anti-corruption institutions, advancing state-owned enterprise reforms, strengthening public investment management, and furthering financial inclusion.

The program remains fully financed under both the baseline and downside scenarios, supported by continued financing assurances from Ukraine's international partners, including via European Commission's € 90 billion Ukraine Support Loan and other facilities, the G7's ERA financing, and other bilateral support. The Group of Creditors of Ukraine, which holds the majority of Ukraine's official bilateral debt has extended the current debt standstill and committed to completing a definitive debt treatment after the resolution of exceptionally high uncertainty (EHU). Timely and predictable external support remains essential for sustaining macroeconomic stability, restoring debt sustainability and external viability, and supporting Ukraine's recovery and reconstruction.

At the conclusion of the Executive Board's discussion, Ms. Kristalina Georgieva, Managing Director of the IMF, issued the following statement:

"Ukraine continues to demonstrate remarkable resilience in the face of Russia's devastating war. Sound policies, anchored by the Fund-supported program, together with strong international support, have helped preserve macroeconomic and financial stability under exceptionally difficult circumstances.

"Preserving macroeconomic stability remains the immediate priority. This requires prudent fiscal policy, sustained revenue mobilization efforts, vigilant monetary policy, exchange rate flexibility, and measures to safeguard financial-sector resilience.

"Looking beyond the war, Ukraine's economic success will depend on accelerating reforms that promote a more dynamic private sector, reduce informality, strengthen governance and the rule of law, improve the investment climate, deepen financial markets, and support EU accession.

The Fund remains committed to supporting Ukraine. Continued reform implementation, as well as strong donor support, will remain vital for preserving stability, maintaining external financing, and laying the foundations for a successful recovery and reconstruction. Readiness to undertake additional measures, if needed, will continue to be an important buffer against potential further shocks."

Executive Board Assessment ^[2]

Directors recognized the enormous human and economic costs of Russia's war and the exceptionally challenging circumstances in Ukraine. They commended the Ukrainian authorities' prudent policymaking which, together with substantial external support and the Fund‑supported program, has helped preserve macroeconomic and financial stability.

Directors welcomed the authorities' continued commitment to the program, as well as their progress in implementing key recommendations from past Article IV consultations. At the same time, they regretted the missed June NIR performance criterion, which was in part due to the war in the Middle East, and expressed concern about slippage in implementing program‑critical structural reforms. With risks remaining exceptionally high, including continued exceptionally high uncertainty surrounding the war, Directors highlighted high enterprise risks.

Directors emphasized that the Fund‑supported program remains a key anchor for sustained macroeconomic stability and underscored the importance of maintaining strong ownership and implementing reforms in a timely manner. This is critical to maintaining policy credibility, catalyzing external financing, supporting Ukraine's EU accession, and achieving program objectives. Directors cautioned against backsliding on reforms and recommended strengthening coordination and building broad‑based support for key reforms.

Directors agreed that near‑term fiscal policy must focus on aligning budget execution with the financing envelope while advancing revenue reforms. They urged prioritizing expenditures while fully implementing key tax policy measures. Directors emphasized that restoring medium‑term fiscal and debt sustainability will require strengthening domestic revenue mobilization and tax administration, enhancing expenditure efficiency, and strengthening budgeting frameworks. Completing the authorities' debt restructuring strategy will also support the return to sustainability.

Directors stressed that monetary policy should remain focused on anchoring inflation expectations and welcomed the greater exchange rate flexibility. They emphasized the importance of preserving the independence of the National Bank of Ukraine and following a data‑dependent approach to monetary policy. Directors recommended a cautious approach to FX liberalization and a gradual return to full‑fledged inflation targeting only when conditions allow. They encouraged continued progress in strengthening financial sector supervision, advancing crisis management frameworks, and continuing to improve governance, particularly of state‑owned banks, in order to support sustainable credit growth and reconstruction. Accelerating AML/CFT reforms will also be important.

Directors emphasized that reinvigorating structural reforms is fundamental to foster a dynamic, more resilient, and market‑based economy. They welcomed the analysis on reducing informality, and highlighted the need for improving the business environment, strengthening governance and the rule of law, and lowering corruption vulnerabilities. They also pointed to the importance of ensuring energy security.

Directors agreed that the extended arrangement for Ukraine continues to satisfy the policies governing the Fund's financing assurances for UCT‑lending under exceptionally high uncertainty. They concurred that the program remains fully financed under both the baseline and downside scenarios and welcomed continued financing assurances from Ukraine's international partners. They emphasized that timely and predictable external support remains indispensable for successful program implementation and restoring debt sustainability and external viability.

Directors also acknowledged that a significant group of Fund shareholders reaffirm their recognition of the Fund's preferred creditor status in respect of the amounts currently outstanding to the Fund by Ukraine, plus any purchases under the extended arrangement. Directors noted that these shareholders further undertake to provide adequate financial support to secure Ukraine's ability to service all of its obligations to the Fund, in accordance with the Fund's preferred creditor status and complementing the Fund's multilayered risk management framework.

It is expected that the next Article IV consultation with Ukraine will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm