Volker: IMF tranche will strengthen the budget of Ukraine, and new gas prices will help in reforming its energy sector

  • Volker IMF tranche will strengthen the budget of Ukraine and new gas prices will help in reforming its energy sector

Kyiv: Kurt Volker, Special Representative of the US State Department for Ukraine, is confident in the positive impact on the financial, economic and energy sector of Ukraine of the new agreement between the IMF and Ukraine and the government decision to change gas tariffs.

He said this in an interview with Interfax-Ukraine. The full text of the communication of Ukrainian journalists with an American politician on the agency’s website will be posted later, but for now, his rating on the above-mentioned decisions is presented in the news feed.

Volker, in particular, believes that the agreement between the International Monetary Fund (IMF) and Ukraine on a new 14-month program of support for economic policy stand-by (SBA) of $ 3.9 billion will help strengthen the budget, and in the long run will contribute to the continuation of the program reforms.

“From the point of view of macro-financial and budgetary benefits for the Ukrainian government, reaching an agreement with the IMF is very important,” the diplomat stressed and predicted: “This will allow the government to continue its activities: to provide services, demonstrate a strong and stable position in the global market.”

Volker added that Ukraine would begin to feel the negative results of the absence of an agreement with the IMF already in January-February 2019.

“It would be a disaster for Ukraine in the macro-financial plan if there was no agreement,” the US Special Representative summed up.

As you know, one of the conditions for the provision of the IMF loan for Ukraine was the requirement to gradually bring gas tariffs to the level of import parity. Since November 1, the price of gas for the population has grown by 23.5%.

But Kurt Volker is confident of the positive consequences of this (formally not very popular with people) solution for other reasons.

The increase in gas prices for the population, in his opinion, will contribute to the reform of the energy sector in Ukraine.

“By taking this step now, Kyiv will begin a structural reform of the energy sector in Ukraine and the entire economy. This was necessary because this sector is not as stable as it once was. This decision will also contribute to stability in the energy sector,   Volker said in an interview.

“Of course, in the winter, when cold weather sets in, price increases may cause difficulties for some people. As far as I understand, the government is implementing a fairly significant subsidy program for low-income families, which should compensate them for high prices, ”the diplomat concluded.

Earlier it became known that the Cabinet of Ministers of Ukraine laid in the draft state budget for 2019 - 55 billion UAH for subsidies for the population.

“The new recalculation of gas prices will not affect the recipients of the subsidy, and those who will not be able to pay for housing and communal services should contact the appropriate authorities for partial compensation,” the Deputy Prime Minister said this on the Ukrainian TV channel.  Ukraine Pavel Rozenko.

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