IMF says Ukraine needs $15 bln in additional assistance

Photo: mises.ca

The International Monetary Fund (IMF) believes that an additional $15 billion should be allocated to Ukraine within weeks to avoid financial collapse, Britain's Financial Times newspaper has reported.

The additional cash needed would come on top of the $17 billion IMF rescue announced in April and due to last until 2016.

According to the newspaper's sources, the fiscal gap has opened up because of a 7% contraction in Ukraine's gross domestic product and a collapse in exports to Russia, the country's biggest trading partner, leading to massive capital outflows and a rundown in central bank reserves.

According to the report, senior western officials involved in the talks said there is only tepid support for such a sizeable increase at a time Kyiv has dragged its feet over the economic and administrative reforms required by the program.

Without additional aid, Kyiv would have to massively slash its budget or be forced to default on its sovereign debt obligations, the newspaper said.

At the same time, on Tuesday, Ukrainian Prime Minister Arseniy Yatseniuk called for the holding of an international donor conference for Ukraine.

"Our task now is the signing and extension of cooperation with the International Monetary Fund. But it's not enough. That's why the second task is an international donor conference and approval of a plan for the restoration of Ukraine," he said.

An IMF mission began to work in Kyiv on Tuesday. Among other things, the talks will concern the reduction of public spending.

Source: Interfax-Ukraine