Finance Minister: "No IMF tranche" scenario off table

Ukrainian Finance Minister Serhiy Marchenko believes a scenario where Ukraine will not receive the next tranche of the International Monetary Fund (IMF) is unrealistic.

"We are fulfilling all our obligations. I don't see the scenario where we won't receive the IMF tranche," he told Strana.ua in an interview, as reported on the ministry's website.

Negotiations are now underway, Marchenko says, with the IMF and lawmakers, where the Finance Ministry explains, why a 6% deficit was laid down in the 2021 draft budget.

"Of course, further reducing budget deficit is our priority in the medium term: we plan to reduce it to 3% of GDP in 2023. But next year, we believe that a balance is needed between fiscal consolidation and instruments to stimulate economic growth," Marchenko said.

Read alsoCabinet starts negotiations with IMF on 2021 state budget deficitThe finance minister also said the IMF mission is expected to arrive in October or November 2020.

"At this stage, we are holding consultations with the IMF. The prime minister has recently had a conversation with the chief of the European Department. We need to go through the stage of discussing the budget for specific parameters. It's not about any requirements, we are just explaining why we have laid down such growth or such expenses. We must be honest partners. Reputation is very important. If we have undertaken obligations, we must comply with them," Marchenko said.

The minister stressed Ukraine and the IMF have a partner relationship, and during the country's specific life cycle (2020-2021), Ukraine needs such partner as the IMF. At the same time, according to Marchenko, the task of the Finance Ministry's Strategy is to turn down any IMF financing starting 2023.

Ukraine-IMF cooperation

• The IMF's Executive Board on June 9, 2020, approved an 18-month Stand-By Arrangement for Ukraine with funding equivalent to SDR 3.6 billion (about US$5 billion), aimed at helping Ukraine overcome the consequences of the COVID-19 pandemic.
• On June 12, Ukraine received the first disbursement of the IMF loan worth US$2.1 billion under the new 18-month cooperation program between Ukraine and the Fund.
• Ukrainian Prime Minister Denys Shmyhal on September 21 held an online meeting with Director of the International Monetary Fund's European Department Alfred Kammer to discuss cooperation with the Fund, Ukraine's key lender.
• The Finance Ministry plans to get the second tranche under the new program of cooperation between Ukraine and the IMF by late 2020.