IMF deputy 'impressed' by Ukraine's move toward reform

IMF deputy 'impressed' by Ukraine's move toward reform

WASHINGTON - The International Monetary Fund's number two said Saturday he was "impressed" by Kiev's plans for economic reform, following a visit to the country.

The IMF, which this year granted Kiev $17 billion (S$21 billion) in financial aid over two years, as part of a $27 billion global rescue package set up by Western countries, warned last month that Ukraine would need as much as an extra $19 billion by the end of next year.

IMF First Deputy Managing Director David Lipton travelled to Kiev on Friday to meet with President Petro Poroshenko, Prime Minister Arseniy Yatsenyuk and members of their economic team.

"I was impressed by their vision for an economic transformation of Ukraine, and by their commitment to decisive, front-loaded implementation of their reform agenda," he said in a statement.

He said an IMF was expected to wrap up technical discussions by the end of next week, while a mission to conduct policy discussions as part of the Fund-supported programme is set to return to Kiev early next year.

Lawmakers voted to approve the government's general programme Thursday that includes a number of severe austerity cuts imposed by international lenders.

The lenders want deep cuts to welfare services and a hike in energy prices to help balance the books.

The architects of the aid package had hoped to use it as an incentive for Ukraine to wean itself off Communist-era subsidies long abandoned by its smaller but now far-better-off neighbours in eastern Europe.

The Fund also wanted to see loss-making state firms privatized and graft that has permeated both ministries and local governments comprehensively punished instead of being swept under the rug.

But few of those steps have yet been taken.

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