Foreign expert skeptical about Ukraine's chance to receive another IMF tranche in 2017

The IMF should clearly understand what the new pension reform entails and how it will affect the budget, the official told Voice of America.

At the same time, Schneider praised Ukraine’s pension reform, which aims to reduce the deficit of the Pension Fund in the medium term.

However, he said that Ukraine spent over 11% of GDP on pensions in 2016, while most retirees received scanty pensions, amounting to only 25% of an average wage.

Read alsoIMF names four conditions for new disbursement to UkraineThe official went on to say that, despite low retirement benefits, the pension system's deficit accounted for 5% of the country's GDP last year. The deficit may widen further, according to discouraging demographic forecasts.

The reform has not increased the retirement age. However, it gradually increases the required employment record to 35 years (until 2028). Thus, some of those who have reached retirement age will continue to contribute to the pension system, according to the expert.

The IIF envoy also stressed the importance of Ukraine’s adoption of healthcare reform, providing for a new system of financing of healthcare facilities, based on the volume of services provided.

Read alsoIMF technical mission to arrive in Kyiv to discuss budgetA new institution, the National Health Service, shall develop a set of services that the state will guarantee and pay for, while patients will pay for the rest. Ukraine also plans to increase healthcare spending, which, according to the expert, along with the possible increase in defense expenditures, may cause a certain increase in the budget deficit.