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New money brings total UK funding for IMF's trusts to $5.3 billion to help reduce poverty and boost energy security, plus $1 billion for Ukraine this year
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Funding confirmed as Chancellor reaffirms his plan to get the U.K. economy growing to global finance ministers meeting in Washington D.C. this week
Today, Jeremy Hunt, Chancellor of the Exchequer, has confirmed the UK stands ready to provide an additional $500m in UK guaranteed loans for Ukraine, taking this year's total to $1 billion and the total amount pledged by the UK in support of Ukraine to £6.5 billion. This comes as he attends the International Monetary Fund's Spring Meetings in Washington D.C., alongside fellow supporters of Ukraine, and today took part in a roundtable on support for the country.
This new money will help to meet Ukraine's economic needs including covering the costs of vital government services, such as running hospitals and schools as well as supporting the most vulnerable Ukrainians.
The Chancellor has also committed a further $670 million to reduce poverty and drive growth, going above and beyond previous commitments to boost financial support for developing nations through the International Monetary Fund's (IMF) Poverty Reduction and Growth Trust. With this pledge the UK has fulfilled the commitment made during its G7 Presidency to deliver multi-billion-dollar funding to fight poverty and boost growth.
This funding brings the total given by the UK to the Trust to $2 billion and comes alongside the UK's delivery of a $3.3 billion pledge to the IMF's Resilience and Sustainability Trust, which provides affordable long-term financing to low-income countries and vulnerable middle-income countries to address challenges such as climate change, energy security and pandemic preparedness.
Chancellor of the Exchequer Jeremy Hunt said:
The $1 billion of budget support we have committed to Ukraine this year will ensure that the country has the financing to keep the lights on, hospitals running and schools open. This, alongside UK military support, will help defeat Putin.
But our efforts for a fairer world don't end there. We are also making good on our G7 Presidency commitments and delivering a multi-billion-pound package of support to reduce poverty and bolster energy security across developing countries.
The UK's financial commitment to Ukraine has helped unlock the IMF's provision of a $15.6 billion 4-year programme for the country.
In total, the UK has pledged £6.5 billion in support of Ukraine, including $1 billion in loans guaranteed by the UK to support Ukraine's economy in 2023 - meaning that it can continue to pay pensions and public sector pay - and £2.3 billion in military support for 2023. This June the UK will also host the Ukraine Recovery Conference, focussing on mobilising further private sector investment.
At the IMF Spring Meetings, the Chancellor will also highlight the impact of Russia's illegal war in Ukraine on the global economy and push for action in addressing developing country needs on debt. The economic impacts from Putin's illegal war in Ukraine are being felt across the globe, with developing nations particularly affected by increases in food prices. The latest $670 million commitment to the Poverty Reduction and Growth Trust adds to the UK's previous agreement to the fund of $1.3 billion, with the total now standing at $2 billion.
The Chancellor signed this commitment on Wednesday alongside IMF Managing Director Kristalina Georgieva. In this meeting, he also finalised a $3.3 billion pledge on behalf of the UK to the IMF's Resilience and Sustainability Trust. Funding for this Trust will play a vital role in providing financing to bolster energy and combat climate change, including for Ukraine and other countries worst affected by the war.
Foreign Secretary James Cleverly said:
Russia continues to bombard Ukraine's people and destroy Ukrainian infrastructure. The UK is resolute in its commitment to support Ukraine until peace is agreed on Ukrainian terms.
This funding will boost Ukraine's economic resilience and bolster its resistance against Russia. Working with the IMF and international partners, I am proud of the UK's contribution to unlocking vital finance for Ukraine.
Ensuring Ukraine's fiscal, humanitarian and recovery needs is a core part of our long-term commitment to Ukraine. That's why the UK is proud to be co-hosting - jointly with Ukraine - the Ukraine Recovery Conference.
A challenging World Economic Outlook published by the IMF earlier this week predicted a 'rocky road' for global economies, including the U.K., however Britain is still forecast to see faster growth than Germany, France and Italy in each of years from 2025 to 2028. The UK avoided recession in 2022 and is now expected to avoid recession this year. According to the independent Office for Budget Responsibility, the UK is on track to more than halve inflation this year and reduce debt by the end of the forecast period.
The Chancellor is currently attending his first IMF meeting in Washington D.C., discussing how his Autumn Statement and Spring Budget have set the UK on a stable path to growth. He will attend IMF Committee meetings, G7 and G20 finance minister meetings and a series of bilateral engagements.
Chancellor of the Exchequer Jeremy Hunt said:
Our support for other countries comes at a time when I am deeply focussed on getting the UK's economy growing, and our plan for that is working as we're on track to halve inflation this year.
A strong UK economy, creating jobs and raising living standards for all will benefit citizens at home as well as having knock on positive impact around the world.
