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MF Announces Staff Level Agreement with Ukraine on US$14.

9 Billion Stand-By Arra

Press Release No 10/281
July 3, 2010
An International Monetary Fund (IMF) mission visited Kyiv during June 21-July 3,
to discuss economic policies that could be supported by a Stand-By Arrangement
(SBA) with the IMF. At the conclusion of the visit, Thanos Arvanitis, Mission Ch
ief for Ukraine, issued the following statement today in Kyiv:
“The mission has reached a staff-level agreement with the authorities of Ukraine
on an economic policy program that can be supported by a 2½ year Stand-By Arran
gement in the amount equivalent to SDR 10 billion (US$14.9 billion). The agreeme
nt reached with the authorities is subject to approval by IMF Management and the
Executive Board.
Consideration by the Executive Board is expected in late July, following approva
l of legislative changes relating to the budget and financial sector.
“The goal of the authorities’ economic program is to entrench fiscal and financi
al stability, advance structural reforms, and put Ukraine on a path of sustainab
le and balanced growth. Policies under the program include fiscal adjustment to
contain the 2010 consolidated general government deficit to 5½ percent of GDP in
2010 and 3½ percent in 2011 with a view to setting public debt firmly on a decl
ining path. The fiscal adjustment is to be achieved by tax and social security s
tructural reforms, expenditure rationalization combined with efforts to improve
tax administration. Additional resources are allocated in the budget to protect
the poorest segment of the population.
“Financial sector reforms are focused on restoring the health of the banking sys
tem, including by ensuring an adequate level of capitalization and strengthening
the independence of the National Bank of Ukraine.
“Energy sector reforms will help to strengthen the gas sector and improve Naftog
az’s financial position, limiting its deficit to 1 percent of GDP in 2010 and ba
lancing its finances in 2011, while, at the same time, protecting the most vulne
rable people. Legislative reforms will be aimed at modernizing the economy and i
mproving business environment, to restore robust economic growth over the coming


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