IMF Approves €604 Million Disbursement to Ukraine Under EFF Program Amid Ongoing Conflict

The International Monetary Fund (IMF) has approved the completion of the first review of Ukraine’s four-year Extended Fund Facility (EFF) program, resulting in an immediate disbursement of approximately $690 million (€604 million) as the second tranche. This development was announced on the night of July 21, marking a significant moment for Ukraine's ongoing financial support amid the ongoing conflict with Russia.

Program Performance and Structural Reform Challenges

According to the IMF, Ukraine's overall performance under the EFF program has been satisfactory. All quantitative performance criteria as of the end of March were met, yet the Fund noted delays in implementing several structural reforms. These reforms span fiscal, governance, anti-corruption, energy, and financial sectors—critical areas for Ukraine's economic stabilization and long-term recovery.

"Ukraine continues to show impressive resilience in the face of the destructive war initiated by Russia," stated IMF Managing Director Kristalina Georgieva. "Sound policies based on the IMF-supported program combined with strong international support have helped maintain macroeconomic and financial stability under extremely challenging conditions."

With this second disbursement, total payments to Ukraine under the program will reach roughly $2.2 billion (€1.9 billion). The IMF’s Executive Board also concluded consultations on measures to preserve macroeconomic stability during the ongoing aggressive war and to support Ukraine's transition toward a dynamic market economy in line with its European Union accession goals.

Economic Outlook and Geopolitical Risks

While the IMF acknowledges Ukraine's resilience, the Fund has downgraded its economic outlook, citing intensified attacks on critical infrastructure and the broader geopolitical fallout from the US and Israeli conflicts with Iran. The Fund forecasts Ukraine’s GDP growth slowing to between 1% and 1.6% in 2024 from 1.8% in 2025, but expects growth to accelerate to 3.5% in 2027 as recovery efforts deepen.

The original 48-month EFF arrangement, valued at $8.1 billion (€6.8 billion), was approved in late February 2024, with an initial immediate payout of around $1.5 billion (€1.3 billion). This financing is part of a broader international support package for Ukraine worth $136.5 billion (€115.6 billion), designed to address a projected fiscal deficit of $136.5 billion over four years.

Supporting sustainable postwar recovery and EU integration remains central to the program’s objectives, with a focus on macroeconomic stabilization and structural reforms. According to a recent report by the World Bank, EU, UN, and the Government of Ukraine, reconstruction costs over the next decade could reach $588 billion (€498 billion), highlighting the scale of economic challenges ahead.

This latest IMF tranche disbursement comes at a critical juncture, providing necessary financial relief as Ukraine continues to navigate the dual pressures of war and economic reform.