Ukraine misses reform benchmarks under IMF program, risks EU aid delay

RRR4U stands for Resilience, Reconstruction and Relief for Ukraine consortium, comprised of four Ukrainian organizations: Economic Strategy Center, Institute for Economic Research and Policy Consulting, Institute for Analytics and Advocacy, DiXi Group.

RRR4U presented their findings at the 13th edition of their monitoring report on the IMF and EU programs for Ukraine.

According to the Ukraine Facility plan, the country is also at risk of missing nine indicators for the first quarter.

On March 28, the IMF Executive Board approved the seventh review of Ukraine’s program. A prerequisite for this was the signing of a law to increase excise taxes on tobacco products, which was delayed by several months, resulting in over UAH 2 billion ($51.28 million USD) in missed budget revenues.

Meanwhile, the deadline for repealing the so-called “Lozovyi amendments” (series of amendments to the Criminal Code, came into effect in 2017) was postponed. These amendments to the Criminal Procedure Code regulate the duration of pre-trial investigations, case closure due to expired time limits, and procedures for extending them.

“Ukraine failed to meet one of its obligations — repealing the Lozovyi amendments — which was a condition for a successful seventh review," said Maksym Samoyliuk, economist at the Center for Economic Strategy.

"The fact that Ukraine still reached a staff-level agreement shows once again that the IMF is being flexible.”

The next eighth review, where the IMF will assess performance as of the end of March, may also face challenges.

“Of the five benchmarks to be assessed by the Fund, only two have been fully and timely met. Three remain unfulfilled:

– appointment of the Bureau of Economic Security head (competition ongoing)
– approval of NABU external audit

– preparation of a strategy for the National Securities and Stock Market Commission.

Progress cannot be considered satisfactory. Ukraine will either have to fulfill the benchmarks late — by June — or negotiate changes or deadline extensions with the IMF,” Samoyliuk added.

Previously, it was reported that the IMF reduced the next tranche from $900 million to $400 million at the request of Ukraine’s Finance Ministry.

“In 2025, we are in a better position with external financing, mainly due to the ERA program — funding from proceeds of frozen Russian assets. That’s why Ukraine asked to receive more financing in 2026–2027 instead,” the expert explained.

In parallel, Ukraine is also working on a reform program with the EU. According to DiXi Group’s Alyona Korohod, problems have already arisen with meeting the Q1 Ukraine Facility targets.

“By the end of March, Ukraine was supposed to meet 16 indicators," she noted.

"As of March 27, only seven had been fulfilled. Nine remain unmet. We may repeat last year’s pattern of delays, which led to postponed reporting and, accordingly, delayed disbursement of funds — potentially until June.”

Earlier in March, the EU Council approved €3.5 billion for Ukraine (including €400 million in grants) for fulfilling Q4 2024 indicators. Overall, Ukraine expects €12.5 billion from the EU in 2025.