Remarks by the IMF’s Managing Director Kristalina Georgieva at the Second Ministerial Roundtable Discussion for Support to Ukraine
October 12, 2022
Good afternoon. It is a pleasure to be here and to co-host, with PM Shmyhal and WB President Malpass, this second Ministerial Roundtable on Ukraine. I am grateful to the Ukrainian authorities—especially PM Shmyhal and Minister Marchenko—for their stewardship of the Ukrainian economy during this time of unprecedented challenges and for their partnership with the international community, including the IMF. I also want to express my deepest sympathy for the continued loss of life in Ukraine, especially in these tragic past few days. And I join others in calling for an end to Russia’s invasion of Ukraine—peace is needed.
We have come here together today to discuss how we can continue to support Ukraine on the economic front. In partnership with the Ukrainian authorities, we have achieved a remarkable feat in 2022: $35 billion in grant and loan financing has been committed from Ukraine’s international partners. The IMF estimates that—based on current projections and assumptions—this will close Ukraine’s financing gap for 2022. This has been important work—work that has gone hand in hand with efforts made by the Ukrainian authorities.
Indeed, the Ukrainian authorities have done an impressive job in managing their economy through extremely difficult circumstances following Russia’s invasion. There are signs of economic stabilization in some parts of the country, although risks remain exceedingly high as demonstrated by the missile attacks this week. The authorities are starting to normalize economic policies, which is critical to bolstering Ukraine’s economic and financial stability. Importantly, the authorities are in the process of preparing a budget for 2023, which will be a key ingredient in economic management in this challenging environment. We are about to start in-person discussions with the authorities on this budget for 2023 and their key policy priorities.
Despite this important progress, Ukraine’s financing needs will remain very large in 2023. This requires actions on the part of the authorities but importantly also the international community. The external financing requirement will remain large as long as the war is ongoing. Our current thinking is that the financing requirements will be around US$3-US$4 billion per month in 2023. This reflects the reality that the fiscal deficit will remain very large, reflecting the impact of the war. In addition, resources will be needed for basic social services, repair of critical infrastructure, and energy imports even before reconstruction starts in earnest. We all have to be alive to the possibility that social and infrastructure requirements could push financing needs beyond this range, depending on the evolution of the war.
The IMF is doing its part to help Ukraine.
- First, we approved $1.3 billion through the food shock window last Friday—a brand new instrument for countries that are suffering from food shocks. After we disburse today, this will bring total IMF emergency disbursements to $2.7 billion in 2022, in addition to $2.2 billion that we have mobilized through our Administered Account.
- Second, we have developed a new monitoring instrument—which we call Program Monitoring with Board Involvement or PMB—to formalize the authorities’ policy commitments and provide transparency on external financing needs and commitments. Last week, the Ukrainian authorities requested such a PMB. The goal of the PMB is to agree with the authorities on a comprehensive macroeconomic framework, with policy undertakings and quantitative targets, that will clarify external financing needs and provide a guide for both domestic policymaking and international support. Discussions on the PMB will start soon and should pave the way for a full-fledged IMF program once conditions allow.
Finally, in my last conversation with President Zelenskyy, he asked the IMF to create a forum—the Ukraine Economic Forum—for sharing information and clarifying financing needs. This would facilitate information sharing and coordination on macroeconomic developments, policies, and projections, based initially on the PMB and eventually on a full-fledged IMF program. It would also provide a venue to discuss Ukraine’s financing needs and to share information on the delivery of donor financing. The PMB that we plan to develop can support such efforts, and—at the request of President Zelenskyy—we will work with the Ukrainian authorities to establish an appropriate forum for such discussions.
Let me close with my sincere hope for peace for the people of Ukraine and for all of the people of our world.
Thank you.