Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has stated that more external money, particularly fast-disbursing awards, is required to help Ukraine preserve macroeconomic and financial stability.
“Without additional support, the great efforts made by the Ukrainian authorities to maintain macroeconomic and financial stability—in the face of enormous shocks and terrible circumstances — will become even harder to sustain,” Ms Georgieva said in her opening remarks at the Ukraine Roundtable, where the country’s Prime Minister Denys Shmyhal was also present as part of the IMF and World Bank’s Spring Meetings.
She emphasized the need of foreign funding, both from bilateral donors and international institutions such as the World Bank, in assisting Ukraine.
“This type of financing, combined with strict limits on cross-border transactions implemented on February 24, has kept the central bank’s foreign exchange reserves constant in comparison to pre-war levels. It has augmented domestic income without relying excessively on monetary financing on the fiscal side “she stated
Ms Georgieva stated that the country’s physical infrastructure and human capital losses are already significant, predicting a deep recession this year, Reuters reports.
“While the exact amount is unknown, we anticipate that $5 billion per month will be required over the next two to three months just to keep the government and economy running in the midst of the battle,” she added. Ukraine’s GDP will decline by about 40 percentage points, according to the IMF’s “World Economic Outlook” released earlier this week.
While the objective today is to keep the Ukrainian government and economy running, the IMF director added that “We must also plan for the future, and we realize that major rehabilitation will be required. It is important to begin this discussion early so that the prospects of a thriving economy serve as a source of hope for the Ukrainian people during their most trying times.”
She said that the IMF had contributed by agreeing to a $1.4 billion Rapid Financing Instrument less than two weeks after the invasion.
“And, just last week, we opened an Administered Account for Ukraine, which will give contributors a safe way to send money to Ukraine. I’d want to express my gratitude to Canada, whose recent federal budget recommended disbursing up to 1 billion Canadian dollars to Ukraine through the Administered Account “Ms. Georgieva continued.