Ukraine in crit­i­cal need of sec­ond IMF aid tranche: PM

The Financial Daily - - IN­TER­NA­TIONAL -

KIEV: Ukrainian Prime Min­is­ter Arseny Yat­se­niuk urged the In­ter­na­tional Mone­tary Fund on Fri­day to re­lease the next tranche of a $17 bil­lion loan and be­moaned the heavy cost of fight­ing a pro-Rus­sian re­bel­lion in the east. Ukraine has com­plied with con­di­tions for the two- year aid package, which is in­tended to shore up de­pleted for­eign cur­rency re­serves and sup­port the state bud­get, but the coun­try faces risks due to the eastern con­flict, the IMF has said. Ukrainian troops and pro- Rus­sian rebels have been fight­ing since April in the heav­ily in­dus­tri­alised re­gions of Donetsk and Luhansk, which to­gether con­trib­uted nearly 17 per­cent of Ukrainian gross do­mes­tic prod­uct in 2013. "The (rev­enue) that we haven't been re­ceiv­ing from Donetsk and Luhansk is minis­cule com­pared with the bil­lions we are spend­ing on war," Yat­se­niuk said at a gov­ern­ment meet­ing. "For us it is crit­i­cally im­por­tant to get a pos­i­tive de­ci­sion from the IMF and we've done ev­ery­thing ( to achieve) this," he said. The exSoviet repub­lic re­ceived a first tranche of slightly more than $3 bil­lion in May and the IMF board will meet later on Fri­day to de­cide whether to ap­prove the next dis­burse­ment, likely to to­tal $1.4 bil­lion. An­a­lysts have said the Ukrainian econ­omy will slide deeper into re­ces­sion this year, de­spite the IMF aid deal, as the re­bel­lion crip­ples ac­tiv­ity in the in­dus­trial east and scares off for­eign in­vestors. Dur­ing its last visit to Kiev in July, the IMF down­graded its growth fore­cast for this year to a 6.5 per­cent con­trac­tion, from 5 per­cent pre­vi­ously.-Reuters

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