Ukraine and the International Monetary Fund reached a last-minute agreement on a new $8.2 billion lending program, easing certain conditions, including sensitive tax increases, according to Prime Minister Yulia Svyrydenko.
The IMF’s board is expected to review the program in its upcoming session. Approval is critical to unlock additional international assistance, including a €90 billion ($106.8 billion) loan from the European Union.
As Ukraine enters the fifth year of its conflict with Russia, the country relies heavily on Western financial aid to support its defense efforts, maintain government operations, and pay wages and pensions.
Recent months have seen economic strain intensify due to Russian airstrikes targeting energy systems and infrastructure, leaving millions without electricity, heating, or water during harsh winter conditions. The National Bank of Ukraine has downgraded its 2026 GDP growth forecast to 1.8% from 2%, citing an energy deficit exceeding prior expectations.
Svyrydenko said the most sensitive element of the IMF program involved taxation on individual business owners. The government agreed to apply value-added tax to this group but raised the taxable revenue threshold to 4 million hryvnia ($85,000), up from the initially planned 1 million hryvnia.
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