The IMF has launched a new program, but Ukraine is finding it increasingly difficult to make decisions, and delays in reforms are costing billions – RRR4U

It is becoming increasingly difficult for Ukraine to make decisions aimed at reform and fulfilling its commitments to partners, which could become critical for financial and economic stability.

This was stated by experts from the RRR4U consortium during a presentation on the monitoring of the implementation of the new IMF program and Ukraine’s Plan under the Ukraine Facility. The event was moderated by Roman Nitsovych, Research Director at DiXi Group.

This time, the World Bank’s support program was also in the spotlight, as this funding is coordinated with the EU and the IMF. There is a risk of a delay in receiving more than $3 billion: parliament needs to pass four European integration bills to unfreeze payments under the Development Policy Operation (DPO).

At the same time, the IMF Executive Board approved a new cooperation program with Ukraine in the amount of $8.1 billion. Twelve structural benchmarks have been identified, of which the tax ones will be difficult to implement.

The “debt” for unfulfilled indicators of Ukraine’s Plan is also growing, leading to the loss of a significant amount of support from the EU and the actual failure of key reforms. To move forward on most of these steps, laws need to be passed.

LAWS FOR RECEIVING ASSISTANCE FROM THE WORLD BANK

Currently at risk is the World Bank’s Development Policy Operation (DPO) worth over $3 billion, which was planned to be provided in the first half of this year. To unblock the funds, the Verkhovna Rada must review and adopt four European integration laws, three of which are also indicators of Ukraine’s Plan:

• On public procurement (№11520);
• On safety and interoperability in rail transport (№14174);
• On the integration of energy markets (№12087-д);
• On the Single European Payment Area, SEPA (№14237).

NEW IMF PROGRAM

Immediately after the new program is approved, Ukraine will receive USD 1.5 billion thanks to the implementation of preliminary measures: adoption of the 2026 State Budget, which complies with the program parameters; a resolution of the Cabinet of Ministers stating that proposals in public procurement are evaluated without taking VAT into account, and a draft Labor Code with an updated definition of hired labor, which has been submitted to parliament for consideration.

In the new program, the IMF has identified 12 structural benchmarks, some of which we have “inherited” from the previous program, as they were not implemented. These include:

• strengthening the structures and decision-making processes of the National Securities and Stock Market Commission;
• appointing a new permanent head of customs;
• introducing a framework for supervising the risks of critically important third parties.

The consortium’s experts identify two more structural benchmarks as risky in terms of non-implementation:

• adoption of a package of tax measures for 2026–2027 (by the end of March 2026);
• submission to parliament of amendments to the Tax Code regarding transfer pricing (by the end of June 2026).

“During the review, as in the previous program, the IMF will add new benchmarks for us, and this must be kept in mind. But the key point is that the Memorandum defines a number of commitments, as well as quantitative indicators that must be implemented”,  said Oleksandra Betliy, a leading researcher at the Institute for Economic Research. “These include new property valuation standards, external evaluation of the NEURC, and the repeal of the “Lozovoy amendments”.

The Memorandum on Economic and Financial Policy also emphasizes the importance of preserving the independence of the National Bank, the effective work of the Economic Security Bureau, and the obligation to preserve the operational independence of Ukraine’s anti-corruption bodies, in particular the NABU, SAP, and VAKS.

The Alternative Executive Director at the International Monetary Fund for Ukraine Vladyslav Rashkovan, spoke about the mechanics of the IMF’s role. According to him, the war is a major shock, unlike any other that the IMF usually works with, emphasizes . The fact that the Fund has included such a factor in the perimeter of its policies is unique. It created a special framework and received the necessary financial guarantees from the EU and assurances from more than 15 countries, including all G7 representatives.

“Kristalina Georgieva’s visit to Kyiv helped us a lot. The Fund Managing Director saw the very difficult situation the city is in after the Russian attacks. This allowed us to make a decision on the new programme, which was supported by 24 countries. Only the Russians were against, as they have been doing that all my years at the IMF”.

UKRAINE’S PLAN: ACCUMULATING UNMET INDICATORS

The implementation of Ukraine’s Plan indicators has slowed significantly, which threatens the loss of large sums of money, warns Vitaliy Nabok, senior policy and data analyst at the Institute for Analytics and Advocacy.

“We owe at least €3.9 billion on 14 indicators from 2025, of which €2.5 billion had to be fulfilled by the end of the fourth quarter. These are significant funds that could well have been used to finance our country’s expenses for a conditional one month of work, ensuring basic state functions.”

According to EU rules, funds for untimely fulfilled obligations can be obtained if no more than one year has passed since the deadline. In view of this, Ukraine may irrevocably lose almost €0.3 billion for the first time for failing to meet the indicator for increasing the staffing of the High Council of Justice. Currently, only one of the eight indicators that must be implemented by the end of the first quarter of 2026 has been met. Instead, there are risks for five of them.

To move forward on most of these steps, laws need to be passed. This highlights the need to get the Verkhovna Rada back to work and to sync up with the Cabinet of Ministers to make up for lost reform momentum.

The full recording of the event is available at: https://youtu.be/W5wVXsXFBM4?si=nQHOIwCbjtMaPTql

Source: DiXi Group