The receipt by Ukraine of the second and subsequent tranches from the International Monetary Fund (IMF) will entail a more confident restoration of the country's macroeconomic figures and growth in the stock market, according to a report by the Sokrat investment group.

Experts expressed confidence that over the first three quarters of 2010, the Ukrainian government had met most of the primary demands set by the IMF, including a reduction in the budget deficit to less than 6% and an increase in the price of gas for the public by 50%, and it had also started taking active measures aimed at drafting and implementing social and economic reforms.

"In 2011, the IMF will expect Ukraine to reduce the pace of borrowing, cut the state budget deficit to no more than 3.5% of GDP, and gradually increase the freedom of the exchange rate," experts said.

At the same time, they said that achieving the budget deficit in 2011 at 3.5% would be a difficult task.

"The government is receiving quick funds to support the budget and replenish the reserves of the National Bank, the country's sovereign ratings are increasing, and investment attractiveness and confidence in Ukraine by foreign investors are growing. In addition, the desire to get the next tranches of the IMF loan disciplines and encourages regulating agencies and helps them set ambitious goals," they said.

As UKRINFORM reported, an IMF mission agreed at the level of experts the issue of the first review of the Stand-By Arrangement with Ukraine. The completion of the review of the program by the IMF Executive Board will result in the release of a tranche worth SDR 1 billion (about USD 1.6 billion), of which USD 1 billion will be provided for budget support.

In July 2010, Ukraine signed a new loan agreement with the IMF, providing for the allocation of a USD 15.8 billion loan over two-and-a-half years in order to stabilize the economy. In August 2010, Ukraine received the first tranche of this loan worth USD 1.89 billion.

UKRINFORM