Ukraine in Arabic | Ukraine needs more financial aid, IMF says
KYIV/Ukraine in Arabic/ The International Monetary Fund has identified a $15bn shortfall in its bailout for war-torn Ukraine and warned western governments the gap will need to be filled within weeks to avoid financial collapse.
The IMF’s calculations lay bare the perilous state of Ukraine’s economy and hint at the financial burden of propping up Kiev as it battles Russian-backed separatist rebels in its eastern regions.
A 7% drop in Ukraine’s gross domestic product (GDP) and a disruption of exports to Russia, the country’s biggest trading partner, have contributed to the fiscal gap, the newspaper stated Tuesday, adding that those factors have led to large capital outflows and a rundown in central bank reserves. Before the start of political unrest in the eastern Ukraine, those regions accounted for around 16 percent of the country's economic output.
Arseniy Yatsenyuk, Prime Minister of Ukraine, said on Tuesday that his government was prepared to put in place belt-tightening measures, such as spending cuts and a crackdown on the shadow economy. He added that his government was not begging for money, but considered IMF as a partner.
According to the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, the European Commission is considering a third rescue program for Ukraine.
Ukraine, currently on the verge of default, is facing a grave economic crisis. Kiev is hoping to save its economy with international financial aid. The additional funding would add to the $17 billion IMF made available in April that is expected to last until 2016. Since then, Kiev has received $8.2 billion in funding from the IMF and other international organizations.