The West gave Ukraine $2 billion: Kyiv received a new deferment of default
The IMF has allocated Kyiv another $1,7 billion tranche of the promised loan, despite Ukraine's failure to meet external debt restructuring requirements. However, Reuters reports , the Fund acknowledged the high risks to the economy and Kyiv's default on debt due to the military conflict, high external debt, and the failure to implement the reforms.
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The agency reports that the greatest risks for the Ukrainian economy, according to IMF analysts, are the conflict in the East and the incompleteness of negotiations on debt restructuring to other creditors. This threatens the financial stability of Ukraine, and, consequently, jeopardizes the return of IMF loans allocated to the country.
“Risks to the economic outlook remain exceptionally high,” the IMF said in a statement. These are: “uncertainty about the duration and depth of the conflict”, “extension of the debt review discussion”, “lag in the implementation of the policy of change”.
Meanwhile, the IMF rescue plan for Ukraine depends on Kyiv being able to restructure its $15 billion debt. Negotiations dragged on for more than four months and came to nothing. But the IMF, contrary to its own requirements, allocated a new tranche of credit, even at the risk of losing it.
The IMF also kept the forecast for Ukraine's GDP unchanged, which is a 9% decline in 2015, inflation at 46%, which is one of the worst indicators of economic decline in the world, which even exceeds the decline in the economy of Syria, which has been destroyed and at war since 2011.
The West has given Ukraine $2 billion: Kyiv has received a new default deferment.