The International Monetary Fund on Wednesday resumed its bailout of war-torn Ukraine, approving disbursement of $1 billion from an aid package that had been held up in part on corruption concerns.
Kiev had been waiting for the resumption of lending since August of last year in a $17.5 billion program intended to help stabilise the country after the 2014 ouster of pro-Russian President Viktor Yanukovych.
A message posted to the official Twitter account of Ukraine’s current president, Petro Poroshenko, welcomed the news.
“The decision by the IMF suggests that the world recognises – in Ukraine there are reforms and that qualitative changes occur, that the country is moving in the right direction,” it said.
Ukraine has suffered deep economic decline after two years of war, with GDP contracting 9.9 percent in 2015. Wednesday’s decision by the IMF Executive Board brings the total amount disbursed to about $7.62 billion, the Fund said in a statement.
The Fund’s Executive Board said it approved the disbursement despite Ukraine’s failure to meet several program targets, including on limiting debt, boosting reserves and easing foreign exchange restrictions.
IMF Managing Director Christine Lagarde said Ukraine had shown “welcome signs of recovery” despite long odds, with inflation receding and activity rising.
“While the social and economic cost of the crisis has been high, growth is expected to be higher in the period ahead,” Lagarde said in a statement, noting that progress was far from complete.
“A sustainable recovery requires completing the structural transformation of the economy, where much remains to be done, including combating corruption and improving governance,” she said.
Reforms proposed by the IMF have been unpopular but local lawmakers have adopted them.
The $1 billion approved Wednesday was short of the $1.6 billion expected in the latest tranche of lending but the Fund did not explain the difference.
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