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article imageUkraine expects another $4.5 bn from IMF this year

By AFP     Apr 4, 2017 in Business

Ukraine expects another $4.5 billion from the International Monetary Fund (IMF) by the end of the year, the National Bank said Tuesday, one day after the fund granted $1 billion for the cash-strapped country.

"According to our forecasts, we expect the receipt of approximately $4.5 billion -- these are three tranches from the IMF -- by the end of this year," the National Bank's deputy head, Oleg Churiy, told journalists.

Just a day before, the IMF had announced the release of a $1 billion loan disbursal to Ukraine, which had been postponed following the trade blockade imposed by Kiev on Russia-backed separatist eastern regions of the country.

Ukraine's pro-western leadership has been desperately waiting for the next instalment of a $17.5-billion rescue programme that has been held up repeatedly since it was agreed in 2015 over delays by Kiev to carry out reforms.

The World Bank released a fresh forecast on Tuesday, projecting Ukraine's economic growth at two percent for 2017.

"There are significant headwinds from the weak global economy and the conflict in the east of Ukraine," said World Bank economist Faruk Khan.

"The coal and trade blockade in the uncontrolled areas of the east of Ukraine are expected to primarily impact two key sectors -- steel production and electricity generation," the expert said in Kiev.

"As a result, our projection of economic growth for 2017 remains modest."

The World Bank also underlined "the instant need to further accelerate reforms" that can make Ukraine's economic recovery "durable".

"So much more needs to be done," said Satu Kahkonen, the World Bank's country director for Belarus, Moldova, and Ukraine.

On Monday, the IMF issued a similar outlook, calling on Kiev to privatize more state-owned companies, create a market for farmland, and overhaul its retirement pension system by making people work longer. The IMF also said Ukraine must fight corruption.

In a fresh forecast released Tuesday, the IMF also predicted two percent growth in the country this year but expressed more optimism about 2018, with an expected economic expansion of 3.2 percent.

"The strength and durability of the recovery depend critically upon the pace and depth of structural reforms in the coming years," the IMF said in its annual review of the Ukrainian economy.

"Rapid and more inclusive growth of at least four percent will be needed over the medium term to recover the lost ground and noticeably improve incomes. Even then, it would take more than a generation for Ukraine to catch up with its regional peers," the IMF said.

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