Ukraine wins debt relief and IMF flexibility in DC — but growth outlook dims

Prefer on Google by Luca Léry Moffat Lars Klingbeil, German finance minister, Serhii Marchenko, finance minister of Ukraine, and Jens Stoltenberg, finance minister of Norway, at a joint press statement at the start of the roundtable of Ukraine donor countries on the margins of the IMF Spring Meetings on April 16, 2026. (Sebastian Christoph Gollnow/picture alliance via Getty Images) WASHINGTON — Ukraine secured two wins in Washington, D.C. this week, including an extension of a debt repayment freeze, as well as signals that the International Monetary Fund would be open to easing some of the tougher elements of the fund's four-year program to Kyiv. Kyiv signed a deal with international partners to suspend debt service due by Ukraine until the end of February 2030, extending a previous arrangement reached in 2023, the finance ministry said on April 17. The fund also signalled it could renegotiate some of the toughest aspects of an $8.1 billion program during its next visit to Kyiv, scheduled for May, three people familiar with the talks told the Kyiv Independent. Ukraine sent a high-level delegation to Washington, D.C. for the International Monetary Fund and World Bank spring meetings , including the country's prime minister, Yulia Svyrydenko, and finance minister, Serhii Marchenko, for high-level talks with the fund, investors, and international partners. The lead-up to the meetings was tainted by scrutiny over Kyiv's slow progress on a long list of reforms tied to financing from the European Union, World Bank, and IMF — including an unpopular VAT tax on self-employed entrepreneurs, a widely-used tax status in Ukraine. Lawmakers failed to pass the tax by a March 31 deadline, along with several other reforms, as a breakdown in relations between the government and parliament and the tough nature of some of the reforms threatened billions in tied aid from international partners — crucial for Kyiv's cash-strapped economy, now in its fifth year of fighting Russia's full-scale invasion. The Ukrainian delegation arrived in D.C. hoping to assess whether the IMF would be open to watering down the politically toxic VAT tax . One Ukrainian official involved in negotiations, speaking to the Kyiv Independent on the condition of anonymity to discuss the confidential talks, said he was more confident than a week ago that the country would pass the next review of the program in May to unlock the next tranche of $685 million. The International Monetary Fund declined to comment on the talks. Ukraine's Finance Ministry did not reply to a request for comment by the time of publication. Ukrainian Prime Minister Yulia Svyrydenko met with IMF Managing Director Kristalina Georgieva on April 16, who explicitly stated that there would be some leeway over the conditions of the program, known as structural benchmarks. "We agreed that in the conditions of a full-scale invasion, it is important for Ukraine to maintain flexibility in implementing structural benchmarks," Svyrydenko posted on Telegram on 16 April. The fund previously weakened some of the conditions of the program in February, converting them from prerequisites for the $8.1 billion program to boxes to tick by March 31. IMF programs have a cascading effect, signaling to other potential lenders and partners that a country is committed to making reforms and being financially sound. But in a week overshadowed by the Iran war's far-reaching impact on global economics, Ukraine's growth is set to be downgraded. The IMF told investors on April 17 that their April 12 forecast of 2% growth for Ukraine in 2026 was too optimistic, and that they expect to downgrade it in the near future, two people with knowledge of the talks told the Kyiv Independent. A Ukrainian official with knowledge of the country's own growth forecasts said that the effect of Russian attacks on energy and the Iran war are two key factors contributing to an upcoming downgrade to Ukraine's own growth forecasts. The IMF's flagship report on the outlook for the global economy, released twice a year, saw downgrades to global growth to 3.1% in 2026, down from 3.3% in January. Russia is one of the only countries in Europe to see a boost to its growth prospects for 2026, as it reaps a windfall from higher oil and gas prices.