The International Monetary Fund (IMF) approved a new $8.1 billion, 48-month Extended Fund Facility (EFF) program for Ukraine, immediately unlocking $1.5 billion as part of a broader $136.5 billion international support package aimed at sustaining the country’s war-time economy.
The IMF Executive Board approved an arrangement totaling Special Drawing Rights (SDR, the IMF’s currency) 5.9353 billion – equivalent to about $8.1 billion – with an immediate disbursement of SDR 1.1 billion (about $1.5 billion).
The new arrangement replaces the 2023 EFF, which has been canceled, as Russia’s full-scale invasion enters its fifth year and uncertainty over the war’s duration continues to cloud Ukraine’s economic outlook.
The IMF announced the news on Feb. 26 in a press release emailed to reporters.
“The new program will build on achievements under the 2023 EFF while addressing the challenges arising from a longer war,” the IMF wrote.
The program is designed to address Ukraine’s balance of payments needs and restore medium-term external viability while the war continues. “The 2023 EFF has, accordingly, been cancelled,” the IMF wrote.
IMF’s forecast for Ukraine’s key macroeconomic indicators
According to the forecast published in the IMF’s press release, the IMF estimated the indicators for 2025 and projected the developments for 2026:
- Ukraine’s growth in real GDP is expected to be at 1.8-2.2% in 2025, 1.8-2.5% in 2026
- Average consumer inflation in 2025 as 12.7%, year-end inflation at 8%, while 2026 average consumer prices for 2025 at 6% and year-end at 7.5%
- Unemployment rate is estimated at 11.6% for 2025 and forecast at 10.2% for 2026
- Nominal wage growth is estimated at 22.6% for 2025, 12% for 2026
- Public debt for the year-end is estimated as 108.7% of GDP for 2025, and 122.6% for 2026
- Current account balance is estimated at -15% to GDP for 2025, -19.4% to GDP for 2026
- Gross reserves for year-end are estimated at $57.3 billion by the end of 2025 (5.7 months of next year’s imports of goods and services), and $65.5 billion for 2026 (7 months of imports)
- Year-end hryvnia per $1 is estimated at Hr. 42 for 2025, Hr. 42.4 for 2026, average rate is estimated at Hr. 40.2 for 2025, Hr. 41.7 for 2026
Why the 2023 IMF program was replaced
As Russia prolongs hostilities and exacerbates them, no matter how much pressure it creates for Russia’s economy, Ukraine needs resources for sustainability for a longer period.
The previous 2023 EFF was planned on the assumption that Russia would end its war against Ukraine in 2025, but that did not happen, prompting Kyiv to request a new extended arrangement under the IMF’s policy for lending under exceptionally high uncertainty.
The IMF has supported Ukraine by way of a four-year Extended Fund Facility program approved in March 2023, worth around $15.6 billion. This is the first IMF program in history granted to a country involved in an active war. The IMF changed its rules to allow lending to countries facing “exceptionally high uncertainty”, meaning countries in full-scale war conditions – that’s where the term came from.
The IMF wrote that “with Russia’s war on Ukraine still ongoing and insufficient time remaining under the 2023 EFF arrangement to restore external viability,” Ukrainian authorities sought a new framework to stabilize the economy and ensure debt sustainability.
“I pray that early in 2026 there will be peace, but – nonetheless – we have to have a program that is anchored in the realities of today,” IMF Managing Director Kristalina Georgieva previously said in an interview with Kyiv Post in January, discussing the new IMF program.
The overarching goals of the new program include maintaining economic and financial stability, restoring debt sustainability under both baseline and downside scenarios, and advancing structural reforms to support post-war reconstruction and Ukraine’s European Union accession.
For this, the IMF set out homework for Ukraine: three priorities for macroeconomic policy, and four objectives for the fiscal policy.
Fiscal discipline, exchange rate flexibility, anti-corruption reforms
Macroeconomic priorities under the program include:
- Implementing prudent fiscal policy, including a “sound” 2026 budget, also measures to boost revenue mobilization by leveling the playing field and reducing tax evasion and avoidance;
- Anchoring price stability and guarding against external imbalances, including through increased exchange rate flexibility;
- Safeguarding financial sector stability.
The IMF press release also wrote that Ukraine’s authorities are committed to implementing structural reforms for a post-war recovery and reconstruction, and the EU accession goal.
For this, the list of homework includes:
- Strengthening fiscal institutions and tax administration
- Enhancing governance and anti-corruption frameworks
- Developing the financial and capital market infrastructure for post-war reconstruction, supported by private credit growth
- Promoting a market-based economy
The program will be recalibrated if peace negotiations succeed, according to the fund. Although at the moment of writing the article, news about Russia’s ballistic, missile, and drone attacks arrive day by day, with no signs of hostilities, including air attacks from Russia coming to an end.
IMF program is a part of a broader $136.5 Billion aid financing package from Ukraine’s partners
The IMF’s financing forms part of a $136.5 billion international support package for Ukraine over four years. For 2026 alone, Kyiv faces a projected $52 billion financing gap, expected to be covered through EU facilities, the G7’s Extraordinary Revenue Acceleration (ERA) mechanism, bilateral assistance, and IMF disbursements.
The Group of Creditors of Ukraine – which holds most of the country’s official bilateral debt – has committed to extending the current debt standstill and completing a definitive debt treatment once the period of exceptionally high uncertainty is resolved. Ukraine reached an agreement with them to rewrite conditions for $20 billion of debt in Ukraine’s Eurobonds in summer 2024 and successfully renegotiated $3.2 billion in GDP-linked warrants in the end of 2025.
In a statement following the board’s decision, IMF Managing Director Kristalina Georgieva said the Ukrainian authorities had maintained macroeconomic and financial stability despite the prolonged war.
“The new EFF arrangement aims to preserve the hard-won macroeconomic and financial stability as well as to extend and deepen structural reforms as the war continues,” the press release quoted Georgieva as saying.
She added that the program is intended to “resolve Ukraine’s balance of payments problem and restore medium-term external viability,” while ensuring strong prospects for reconstruction and growth and facilitating Ukraine’s path toward EU accession.
Georgieva cautioned, however, that risks to the program remain “exceptionally high” and that its success depends on continued international support and Kyiv’s commitment to implementing reforms.A group of IMF shareholders – Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, the United Kingdom, and the United States – reaffirmed recognition of the fund’s preferred creditor status and pledged to provide adequate financial support to ensure Ukraine can service its obligations to the IMF.