KYIV, May 24 – A senior International Monetary Fund official said on Wednesday growth in industrial production heralded a better year for Ukraine than past ones, but urged the government to seize the chance to speed up reforms.
The head of the IMF's second European department John Odling-Smee told Ukrainian Prime Minister Viktor Yushchenko and other top officials at a working meeting in Kyiv the Fund also approved of moves to plug holes in this year's budget.
'There is good recovery of production and we, along with many other forecasters … are forecasting growth in production for the year as a whole,' Odling-Smee told officials at the start of the meeting, which was later closed to journalists.
'This is not only a sign that some things are beginning to go well; it also creates room to move ahead faster with reforms as it is always easier to reform when the economy is growing.'
Government officials have hailed a string of rosy economic indicators in the first few months of the year, including 8.8 percent growth in industrial production in March compared to the previous month.
They say the figures promise Ukraine's first economic growth – a rise of up to two percent in gross domestic product – since it broke from the Soviet Union in 1991.
'In the budget and in policy in general there is also some good progress,' Odling-Smee said, noting the government had cracked down on several practices which have in the past robbed state coffers of millions of hryvnas of potential revenue.
But some economists say the figures could be due as much to lavish money printing ahead of last year's presidential election as the new government's efforts, and even President Leonid Kuchma has criticized officials for excessive optimism. Ukraine is anxious for the Fund to renew lending under its $2.6 billion economic programme, but slow reforms and an audit showing Ukraine received loans after misleading the Fund about the size of reserves in 1997-1998 have delayed disbursement.
Ukrainian officials expect the next IMF mission to arrive in early June and hope the IMF will decide to renew lending soon afterward, perhaps as early as in July.
Officials said after the meeting the discussions had been broad and the date of the mission had yet to be determined
