Ukraine and the International Monetary Fund (IMF) have reached an agreement on new financial support amid the effects of the coronavirus pandemic. An IMF staff team led by Ivanna Vladkova Hollar said it concluded remote discussions with the Ukrainian authorities on May 21 and reached a staff-level agreement on economic policies for a new 18-month Stand-By Arrangement (SBA) that will provide emergency funds to the country.
The new SBA worth $5 billion aims to provide budget support to help the authorities address the effects of the COVID-19 shock, UNIAN reported, adding that the funds will help the government to consolidate achievements to date, and move forward on important structural reforms.
Vladkova Hollar said in a statement: “The International Monetary Fund (IMF) staff and the Ukrainian authorities have reached staff-level agreement on economic policies for a new 18-month Stand-By Arrangement (SBA)… This will ensure that Ukraine is well-poised to return to growth and resume broader reform efforts when the crisis ends. The arrangement is also expected to catalyze additional bilateral and multilateral financial support.” The agreement is subject to approval by Fund Management and the IMF Executive Board, UNIAN reports.
The IMF money will support the country’s budget, President Volodymyr Zelensky has said. During a phone conversation with President of Finland Sauli Niinistö, Zelensky said that Ukraine and the International Monetary Fund (IMF) agreed on the new 18-month Stand-By Arrangement (SBA) of $5 billion, Interfax reported.
Zelensky reportedly said: “All the prerequisites for starting practical work on the IMF program have been fulfilled, the IMF money is sent to maintain the balance of payments and support the budget.”
The G7 Ambassadors to Ukraine have welcomed the new agreement between Ukraine and the IMF. “The G7 Ambassadors congratulate Ukraine and the IMF on reaching staff-level agreement on a new assistance program that will bolster Ukraine’s macroeconomic stability and help it manage the COVID-19 crisis,” reads a statement posted by the G7 Ambassadors’ Support Group in Kyiv on Twitter.
Expert projects at least 8% decline in Ukrainian exports in 2020. Supplies of Ukrainian goods to Russia, Poland, Italy, and Hungary will suffer the most, UNIAN reports. Representative of Trade + International Trade Research Center Maryna Khorunzha projects exports of Ukrainian commodities in 2020 may see at least an 8% decline over a reduction in shipments of agricultural products and metallurgical goods abroad.
Khorunzha said: “According to our preliminary estimates, Ukrainian exports may decline by 8.1% in 2020 because of a drop in agri-exports and metal shipments alone. Exports to those countries that have strict quarantine measures and buy mainly industrial goods from Ukraine will suffer the most.”
Ukraine will be able to fully open borders with neighboring states around mid-July, Minister of Internal Affairs Arsen Avakov has suggested, as reported by UNIAN. The Minister emphasized that crossing points on Ukraine-EU borders were gradually being put back into operation. The Cabinet yesterday approved a relaunch of 66 checkpoints on the borders with the Republic of Poland, Hungary, the Slovak Republic, Romania, and the Republic of Moldova.
Most Ukrainian companies are likely to need up to 12 months to recover from the COVID-19 economic downturn, research shows. At the same time, some 62% of the respondents to a survey said their companies had managed to keep their employees’ pay unchanged. “Some 20% of entrepreneurs say it will take six months to achieve a pre-quarantine revenue level, while 39% believe it will take them about a year,” according to findings of a survey of 105 top managers from European Business Association (EBA) member companies. “Another 17% think it will take two years, and 7% say it will take more than two years,” the survey taken in the third week of May found.
Retail trade in Ukraine was down almost 15% in April compared to the same month last year, and was down 23% compared to March 2020, according to the Ukrainian State Statistics Service.
Ukraine will send evidence of Russia’s alleged crimes in the Kerch Strait to a United Nations arbitration tribunal, Foreign Minister Dmytro Kuleba has said. On the morning of November 25, 2018, Russia blocked passage through the Kerch Strait from the Black Sea to the Azov Sea, placing an effective blockade on the Ukrainian port cities of Mariupol and Berdyansk. Multiple experts and Ukrainian lawmakers argue that Russia has been violating international maritime law with its actions in and around the Strait.
Kuleba says Ukraine will bring its case to the Arbitral Tribunal in The Hague under the United Nations Convention on the Law of the Sea. The foreign minister said in a statement: “Facts, photos, evidence, and [Ukraine’s] arguments are presented here in a consistent, qualitative manner… We will not stop until the Russian Federation is held accountable for everything that it has done against Ukraine.”
