IMF provides new list of structural beacons for Ukraine following EFF programme

The International Monetary Fund (IMF) has drawn conclusions concerning Ukraine’s fulfilment of previous structural beacons and provided the new ones for 2024.

Source: report by the IMF

Details: The already fulfilled requirements mostly concern fiscal and monetary policy, and the non-fulfilled ones – anti-corruption and state policy. For instance, the law about opening declarations, changes to the law on money laundering and the bill about tax policy and administration were adopted with delay.

The deadline of the requirements concerning the focus on small and medium businesses in the context of the 5-7-9 loan programme was postponed until March 2024. All other requirements were fulfilled.

Among the short-term requirements are the management of state investments, adoption of income strategies, increasing revenue to the state budget by 0.5% of the GDP, which is approximately UAH 38 billion (about US$1 billion).

The long-term requirements include the changes needed for independence of anti-corruption policy, re-launch of the Bureau of Economic Security and actions aimed at the optimization of the budget and the banking sector.

Here is an updated list of structural beacons which must be fulfilled:

• reconsider current state investments management procedures and create a roadmap of measures (deadline – end of December 2023);
• adopt the National Income Strategy (deadline – end of December 2023);
• adopt legislation for strengthening institutional autonomy and efficiency of the Specialized Anti-Corruption Prosecutor’s Office by giving it a status of a separate legal entity (deadline – December 2023);
• increase the income by 0.5% of the GDP in order to include it in the 2024 state budget (deadline – end of February 2024);
• introduce changes to the procedural code with the goal of rationalisation of cases which must be considered at first instance by one anti-corruption judge or a board of three anti-corruption judges (deadline – end of March 2024);
• calculate the debts of the central heat providers (deadline – end of June 2024);
• reestablish the Bureau of Economic Security of Ukraine (deadline – end of June 2024);
• implement the methodology of assessment of taxing risks for defining priorities of supervisory activity (deadline – end of June 2024);
• assess the efficiency of tax benefits, including their cost for the budget (deadline – end of July 2024);
• adopt a law on creation of a new court which will consider administrative cases against national state bodies (the National Bank of Ukraine, the National Anti-Corruption Bureau of Ukraine, the National Agency of Corruption Prevention of Ukraine) (deadline – end of July 2024);
• develop a policy of state property at state companies, dividend policy and strategy of privatisation (deadline – end of August 2024);
• finish the external audit of efficiency of the National Anti-Corruption Bureau (deadline – end of September 2024);
• determine the main state companies severely affected by the war and prepare a review of potential fiscal and quasi-fiscal expenditures (deadline – end of September 2024);
• review medium-term state planning policy jointly with the IMF (deadline – end of October 2024);
• implement changes to state investment programmes (deadline – December 2024);
• prepare a concept for rehabilitation of banks (postponed until December 2024);
• all banks with majority state ownership remain under the guidance of the Treasury of Ukraine, and nationalised non-systematic banks will be handed over to the Deposit Guarantee Fund.

Background: On 11 December, the board of directors of the IMF approved the second review of the Extended Fund Facility – now Ukraine will be able to receive the third tranche of the amount of about US$900 million.

The IMF improved their forecast of GDP of Ukraine to 4.5% at the end of this year, and changed the forecast for 2024.

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