IMF downgrades Ukraine's growth outlook as it approves $2.2 billion payment

The IMF executive board voted Friday to approve a $2.2 billion payout for Ukraine under an existing loan program, and lowered its growth outlook following "devastating" Russian attacks against the country's energy infrastructure.

The much-needed funds will be used for "budget support," and bring the total amount disbursed under the 48-month loan agreement to around $7.6 billion, the International Monetary Fund said in a statement announcing the decision.

"Despite the war, macroeconomic and financial stability has been preserved through skillful policymaking by the Ukrainian authorities as well as substantial external support," IMF managing director Kristalina Georgieva said in the statement.

"The economy remains resilient, reflecting the continued adaptability of households and firms," she added.

The IMF said all quantitative performance criteria had been met through the end of March, and that all the structural benchmarks had been met more or less on time.

The IMF said that the Ukrainian economy had been more resilient than expected in the first quarter of this year, but warned that the future was less positive than it had previously predicted.

"The outlook for the remainder of the year and into 2025 has worsened, largely due to devastating attacks on Ukrainian energy infrastructure and uncertainty about the length of Russia's war against Ukraine," the report found.

The IMF now expects Ukraine's economy to grow by between 2.5 percent and 3.5 percent this year, suggesting that growth could come in slightly below its April forecast of 3.2 percent.

It expects growth to reach 5.5 percent in 2025, down sharply from 6.5 percent in April.

"Overall, the outlook remains subject to exceptionally high uncertainty," the IMF said.