**IMF Urges Ukraine to Stick to Reforms, Sees Lower Growth in Russia**
The International Monetary Fund (IMF) has urged Ukraine to continue its economic reforms and national revenue strategy as the country battles against Russia’s invasion. The IMF also warned that Russia’s economic growth may be lower than previously forecast.
According to IMF spokeswoman Julie Kozack, recent developments in Russia suggest that its economic growth could be lower than the 1.5% projected by the IMF in April. The global lender will update its forecast in July. This slowdown is attributed to cyclical factors such as last year’s overheating, lower oil prices, and tighter Western sanctions imposed over Russia’s war in Ukraine.
The IMF has completed its eighth review of Ukraine’s $15.5 billion, four-year support program. This paves the way for an additional $500 million disbursement to Ukraine, bringing total disbursements to $10.6 billion. The review found that Ukraine’s economy remains resilient but warns of ongoing and “exceptionally high” risks to the country’s outlook.
To restore fiscal stability in Ukraine, the IMF recommends a sustained and decisive effort to boost revenues through modernizing the tax and customs system, and steps to reduce tax evasion. The ninth review will take place toward the end of the year and be combined with the 10th review after Ukraine requested a re-phasing to better match its financing needs.
The IMF maintained its 2025 economic growth forecast of 2-3% for Ukraine, citing lower gas production and weaker agricultural exports. Kyiv will need a supplementary budget for 2025 due to pressures from the war.
**Russia’s Economy Slowing Down**
In contrast, Russia’s economy is rapidly slowing down, with risks rising according to IMF spokeswoman Julie Kozack. Russian inflation remains high, although the IMF expects it to come down and decline over time.
The situation in Ukraine continues to be challenging, with Russia amassing forces and advancing in rural areas despite heavy losses. The country has also faced increased drone and missile strikes on Kyiv and other cities. Despite efforts by U.S. President Donald Trump to broker a ceasefire, the full-scale invasion launched by Russia in 2022 has had little success.
**What’s Next?**
The IMF will continue to monitor the situation in Ukraine and Russia. The ninth review of Ukraine’s loan program is expected to be combined with the 10th review towards the end of the year. The global lender will also update its forecast for Russia’s economic growth in July.
As the war in Ukraine continues, it remains essential for the country to stick to its economic reforms and national revenue strategy to restore fiscal stability. The IMF’s recommendations aim to help Ukraine navigate these challenging times.
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