Photo by Roman Synkevych on Unsplash

According to JP Morgan, it is possible that Ukraine will receive $1.4 billion by the end of this year, which will help stabilize the Ukrainian economy. 

The Ukrainian government previously said that Ukraine is expecting GDP to grow by four percent this year. Despite this, the Ukrainian government is still vulnerable and requires further loans to stabilize the economy, especially if a new lockdown is introduced. 

JP Morgan reports that it is likely that Ukraine will receive $1.4 billion from the International Monetary Fund, IMF, by the end of this year, according to Interfax Ukraine

“We believe that the IMF will pay a tranche of $ 1.4 billion in the fourth quarter of 2021, but is considering a possible range of this amount from $ 1 billion to $ 1.5 billion,” JP Morgan wrote in a report and added that they expect the Ukrainian economy to grow by 4.5 percent this year and by five percent in 2022. 

The unstable relationship with the IMF

The relationship between the IMF and the Ukrainian government has been unstable for a long time. In June 2020, Ukraine was given the first $2.1 billion tranche of a $5 billion loan, which was part of a Stand-by-Agreement between the two parties. The deal, however, came under several conditions about reforms of the Ukrainian economy, which didn’t happen and have made the IMF withhold the next part of the payments. 

In September, the IMF agreed to begin talks with Ukraine again about a revision of the loans. The National Bank of Ukraine recently stressed in a report that the relationship with international parties such as the IMF is of great importance for Ukraine. 

“It is very important for me to maintain a dialogue with international partners, which enables us to discuss our achievements and lines of further cooperation,” Kyrylo Shevchenko emphasized, according to the National Bank of Ukraine, and added that the bank is working with the IMF about strengthening the banks institutional capacity and independence. 

EU ready to give money to Ukraine

The relationship with the IMF is important because other institutions normally follow the fund’s recommendation. However, yesterday, the EU did approve a 600 million euro tranche to Ukraine as a macro-financial support package, writes Kyiv Post

The newspaper notes that it is happening without waiting for the approval of the IMF.  

“We welcomed the implementation of the EU Emergency Macro-Financial Assistance Program for Ukraine and took note of the decision to allocate the second tranche of 600 million euros,” says an official joint statement by Ukraine and the EU.

“We emphasize the importance of continuing the relevant reforms. We reaffirmed the importance of maintaining Ukraine’s macroeconomic stability and adherence to IMF commitments,” the statement also read.