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“Any growth will go into the pocket of lenders”: Ukraine agreed with the IMF on a new loan for $ 5.5 billion


The IMF and Ukraine agreed on a new program under which Kiev will receive $ 5.5 billion in financial assistance for three years. The corresponding outcome of the negotiations was confirmed by President of Ukraine Vladimir Zelensky and IMF Head Kristalina Georgieva. The Ukrainian leader believes that the funds allocated to Kiev will go to stimulate economic growth, fight corruption and increase the welfare of citizens. However, experts believe that new IMF loans are only suitable for paying off previous debts to the organization.

Ukraine and the International Monetary Fund have agreed on a new cooperation program, involving a loan to Kiev in the amount of about $ 5.5 billion for three years. This was reported by the press services of the President of Ukraine and the IMF.

From a statement on the Ukrainian leader’s website it follows that the agreement was reached following a telephone conversation between President of the country Vladimir Zelensky and IMF head Kristalina Georgieva on December 7.

“IMF staff reached an agreement with the authorities regarding the policy underlying the new three-year agreement worth 4 billion special drawing rights (about $ 5.5 billion - RT ) under the expanded financing mechanism,” she said on the website of the President of Ukraine.

The head of the IMF noted the organization’s readiness to support the political program of the Ukrainian authorities, the goal of which, according to Georgieva, is to bring the country's economy onto the path of "higher, sustainable and comprehensive growth."

In turn, Zelensky indicated that the “turbo regime” of Ukraine was highly appreciated by the IMF.

“I am grateful to the parliament, government and our entire team for the tireless work for the sake of Ukraine. The new program of cooperation with the International Monetary Fund aims to accelerate economic growth, actively eradicate corruption and increase the welfare of every Ukrainian, ”Zelensky said.

According to him, the reforms in Ukraine will continue so that the country can “catch up” with neighboring states in terms of economic development and welfare.

Commenting on the new agreement between the IMF and Ukraine, Viktor Vodolatsky, Deputy Chairman of the State Duma Committee on CIS Affairs, Eurasian Integration and Relations with Compatriots, noted that the task of such announcements is to demonstrate Zelensky in the status of an “effective manager”.

“In order to show that the president of Ukraine is trying today at the international level to solve problems, including the withdrawal from economic stagnation, these are the statements and the head of the IMF that they are trying to raise the economy of Ukraine in such tranches,” he said MP in conversation with RT.

At the same time, he pointed out that during the years of the presidency of Petro Poroshenko there were several similar tranches of the IMF.

“They completely eliminated the independence of economic management in Ukraine. This tranche of $ 5.5 billion will further pull down the development of the Ukrainian economy, ”the deputy believes.

Reform money

Ukrainian Prime Minister Aleksey Goncharuk called the new loan program of the International Monetary Fund (IMF) “a marker of confidence in the country.”

“Support for such large system institutions is a marker of confidence in the country. This means that there will be cheap resources for us - for the whole business and all Ukrainians this means that the economy will grow faster, there will be more jobs, higher salaries, ”Goncharuk wrote on Telegram.

Speaking about attracting foreign financial resources by Kiev, he expressed confidence that Ukraine “will cope with all payments” that the country is obliged to make.

In turn, the head of the Ukrainian Ministry of Finance, Oksana Markarova, said that the funds allocated by the IMF will go to reform. In her opinion, in three years Ukraine will no longer need the help of the IMF.

“Ahead is the implementation of the program, which is actually the reform program of Ukraine, which will lead to accelerated economic growth, improved ratings of Ukraine,” the minister wrote on Facebook.

  • Reuters
  • © Yuri Gripas

However, experts are skeptical about the prospects that are opening with the new agreements of the IMF and Ukraine. As Ukrainian political scientist and economist Alexander Dudchak put it in an interview with RT, the IMF’s policy “supports a coma, but does not save the economy.”

He expressed the view that IMF loans could be one of the reasons for the aggravation of the development of the Ukrainian economy.

“The fact that they say that they are interested in economic growth and development is still connected with the debt restructuring that was carried out under Poroshenko. Any growth (of economy. - RT ) that will be there, although more or less noticeable - it will still go into the pocket of external creditors, ”the expert concluded.

In turn, the head of the Ukrainian Analytical Center, economist Alexander Okhrimenko, noted that in 2019 Ukraine repaid most of the loans. According to him, this is, inter alia, a $ 1.3 billion IMF loan. According to the expert, a comparable amount will be paid off next year.

“IMF loans are meaningless, they can only be used to repay old IMF loans,” Ohrimenko stated in an interview with RT.

In his opinion, any adopted agreements will not affect the Ukrainian economy in any way.

“As long as Ukraine will deal with the IMF, nothing good will happen,” the expert said.

Source: russiart

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