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Downside scenario of IMF program for Ukraine assumes end of war in late 2025, rise in aid to $240 bln

KYIV. April 1 (Interfax-Ukraine) – The basic scenario of the four-year EFF program of the International Monetary Fund (IMF) for Ukraine assumes the winding down of the war in the middle of 2024, while the negative one – by the end of 2025, IMF mission chief for Ukraine Gavin Gray said.

He said at a briefing on Friday following the approval of the $15.6 billion EFF program that the difference between the baseline scenario and the downside scenario had to do with how we assume the duration and, to some extent, the intensity of the war.

“When we look at the estimated financing gap, in the baseline scenario it is $115 billion, in the downside – it goes up to $240 billion,” he said.

The head of the mission explained that, obviously, if the war drags on, the increase in negative side effects on the economy would be greater.

At the same time, the IMF representative emphasized that the program provides for additional guarantees from a number of IMF shareholders, in particular the G7 countries, Belgium, Lithuania, the Netherlands, Poland, Slovakia, and Spain.

“They further undertake to provide adequate financial support to secure Ukraine’s ability to service all of its obligations to the fund, in accordance with the fund’s preferred creditor status and complementing the fund’s multilayered risk management framework,” the fund said in the release.

Gray explained that, in practice, this means that even if the situation develops worse than the negative scenario, these donors will work with the IMF to help ensure that Ukraine can continue to meet its obligations.

As reported, the official Ukrainian forecasts are based on the scenario winding down the war until 2024.