Press Release No. 13/44

Press Release: IMF Mission Concludes First Stage of Discussions on a Stand-By Arrangement with Ukraine

February 12, 2013

An International Monetary Fund (IMF) mission visited Kyiv during January 29-February 12, to discuss economic policies that could be supported by a Stand-By Arrangement (SBA) with the IMF. On February 11, David Lipton, First Deputy Managing Director of the IMF, joined the discussions. At the conclusion of the visit, Christopher Jarvis, Mission Chief for Ukraine, issued the following statement today in Kyiv:

“Ukraine faces serious challenges. Economic activity sharply slowed down in the second half of 2012 as a result of deteriorating trade conditions and uncertainties in global financial markets. Also in 2012, the current account deficit widened rapidly and the fiscal accounts deteriorated. Large subsidies on gas and heating for households continue to undermine Ukraine’s budget and its balance of payments. In the absence of corrective policies our forecast for 2013 is growth of 0-1 percent and a high current account deficit that leaves Ukraine vulnerable to shocks.

“With better policies Ukraine can achieve better outcomes. We have made significant progress toward reaching understandings with the authorities on policies which will bring down the budget and current account deficits, strengthen reserves and create jobs and growth. Important policy issues remain outstanding, and further technical work needs to be completed. We expect the mission to return to Kyiv in March to continue the discussions.”