The recent approval of the new IMF programme at the staff level took place against the backdrop of Ukraine’s significant lag in reforms: three milestones of the current programme have not been met, and three more are at significant risk of not being met by the end of the year. This was reported by the RRR4U analytical consortium during the presentation of the 21st monitoring of the implementation of the IMF programme and EU assistance.
‘According to Ukraine’s Plan, the situation with reforms is even more complicated: in the first three quarters of the year, five indicators were not met, and in the last quarter, 15 out of 20 indicators are in the process of being met,’ said Roman Nitsovich, research director at DiXi Group. The consortium’s experts warn that failure to fulfil key commitments could negatively affect further international funding.
Implementation of the IMF programme
According to leading IER expert Oleksandra Betliy, the implementation of the structural benchmarks of the current IMF programme (EFF) is systematically deteriorating. The following key reforms remain unfulfilled:
- Financial companies that provide services critical to the functioning of banks have not yet come under the supervision of the National Bank of Ukraine. This refers to the ‘bank in a smartphone’ model, such as Monobank, where the bank’s operations are closely linked to non-banking companies. Currently, such companies are not subject to NBU regulation.
- The issue of repealing the so-called ‘Lozovoy amendments’ remains unresolved. This refers to the repeal of the restriction in the Criminal Code of Ukraine on the duration of pre-trial investigations until a notice of suspicion is issued. This should prevent the ‘premature’ closure of cases. At the same time, the business community is largely opposed to the repeal of these amendments.
- The procedure for selecting and appointing members of supervisory boards of state-owned enterprises has not been changed. Ukraine had previously committed to reviewing the procedures for selecting and appointing members of supervisory boards of state-owned enterprises and amending the relevant subordinate legislation of the CMU. The changes were intended to improve the efficiency of the selection of supervisory board members.
Ukraine will also not be able to appoint a permanent head of the State Customs Service of Ukraine (another beacon) by the end of the year, as the competition commission plans to complete the selection process only in March 2026.
It should be noted that the new IMF programme worth $8.1 billion is designed to last four years and is vital for the country’s macro-financial stability. “The programme will serve as an anchor for international assistance, which should cover the budget financing needs. According to the Fund’s own estimates, the fiscal gap could amount to $135.6 billion in the period 2026-2029,” Oleksandra Betliy emphasised. She also added that the support would require Ukraine to take on additional tax commitments.
Implementation of the Ukraine Facility
According to Roman Nitsovich, Ukraine’s Plan carries a high risk of failure to meet the indicators for the fourth quarter of this year. In particular, a number of key bills envisaged in Ukraine’s Plan must be adopted in December:
- on amendments to certain laws of Ukraine regarding the resumption of competitions and improvement of the procedure for entering, passing, and terminating civil service (13478-1);
- on the basic principles of housing policy (12377);
- on the basic principles of state supervision (14030);
- on amendments to certain laws of Ukraine regarding support for the development of efficient and sustainable centralised heat supply (14067);
- on the safety and interoperability of railway transport in Ukraine (14174).
The government has yet to submit draft legislation to Parliament on three indicators that must be met by the end of this year:
- on reinstating the law on state aid, restoring control over it and harmonising it with the EU acquis;
- on reducing licensing procedures for investments in renewable energy in accordance with EU rules;
- on determining the special status of the NEURC.
All of the above-mentioned draft laws must not only be adopted, but also come into force in the fourth quarter of 2025.
You can view the recording of the presentation at https://www.youtube.com/watch?v=WjTMnymJEgs.
The monitoring reports can be viewed on the RRR4U website.
The monitoring and event were prepared with the support of the International Renaissance Foundation.
RRR4U (Resilience, Reconstruction and Relief for Ukraine) is a consortium of four Ukrainian civil society organisations: the Centre for Economic Strategy, the Institute for Economic Research and Policy Consulting, the Institute for Analytics and Advocacy, and DiXi Group.
Source: IER
