The IMF mission to arrive in September, Kristalina Georgieva says

UKRAINE - In Brief 29 Jul 2021 by Dmytro Boyarchuk
Ukraine’s President Volodymyr Zelenskiy had a phone call with Managing Director of the IMF Kristalina Georgieva yesterday on July 28. Kristalina Georgieva recognized “sound economic progress made under the IMF program” and mentioned the IMF mission arriving in September. The President Office mentioned that strengthening corporate governance in banks, the draft law on the NBU, the law on the NABU and recently approved two laws on judicial reform were on agenda. I absolutely agree that we had a real breakthrough with judicial reform which should be acknowledged. However, I think the main reason of this visit is to make instructions for the Ukrainian authorities how to behave with $2.73 billion from the new SDR allocation that is expected to arrive soon. Why do I think so? In September the budget process will start, and even if the IMF mission delivers positive conclusions, the IMF Board most likely will prefer to wait and see the legislatively approved spending plan for 2022. What’s more, it is not clear how the authorities will behave on natural gas and heating tariffs for the next heating season. Natural gas prices are hitting new highs, while the authorities are unlikely to let heating tariffs go up – it’s politically painful for Zelenskiy. What will happen in October-November with natural gas tariffs is under a big question mark. The IMF very likely will prefer to wait till Ukrainian authorities give an exhaustive answer to this question. Against this backdrop we should not expect the IMF program review in September. Why is the IMF mission is arriving then? The $2.73 billion from the new SDR allocation might be in focus. After President Volodymyr Zelenskiy approved t...

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