IMF allocates 1.3 billion extra euros to Ukraine to tackle potential food crisis

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The Executive Board of the International Monetary Fund (IMF) has approved this Friday the disbursement of 1.3 billion dollars (a similar figure in euros) to Ukraine to tackle a possible food crisis.

Specifically, the financial organization has argued that Ukrainian authorities “deserve considerable credit” for having maintained a significant degree of macro-financial stability in these “extremely difficult” circumstances, the organization said in a statement.

“More than seven months after the start of the Russian invasion of Ukraine, the humanitarian and economic cost remains enormous, generating large and urgent external and fiscal financing needs,” the IMF has expressed, advancing that the new financing to Ukraine is framed within the ‘Shock Window’ Food Program.

“The authorities deserve considerable credit for having maintained a significant degree of macro-financial stability in these extremely challenging circumstances,” the financial body has added in its missive.

The IMF has asserted that Ukraine faces risks and uncertainties related to its security situation, its ability to implement policies across the country, and other external developments.

That is why the agency’s Executive Board has expressed understanding for the added difficulty in assessing with sufficient precision what Ukraine would require to ensure Ukraine’s debt sustainability.

All in all, the IMF has estimated that amid massive population displacement and the destruction of housing and key infrastructure, Ukrainian Gross Domestic Product (GDP) will contract by 35 percent in 2022 relative to 2022.

For this reason, the agency has announced its intention to help meet “urgent needs” of the Ukrainian balance of payments, including due to its large grain export deficit. It will also play “a catalytic role” in collecting increased financial support from Ukraine’s creditors and donors.

“The Fund will continue to work closely with the Ukrainian authorities, with whom discussions will soon begin to further catalyze donor support and help pave the way toward the upper credit tranche arrangement,” the IMF has said in its written statement.