WASHINGTON - The International Monetary Fund has approved a $15.6 billion support package for Ukraine to assist with the conflict-hit country's economic recovery, the fund said in a statement Friday.
Russia's invasion has devastated Ukraine's economy, causing activity to contract by about 30% last year, destroying much of its capital stock and spreading poverty, according to the IMF.
The outbreak of war has rippled through the global economy, fueling global inflation through rising wheat and oil prices.
The invasion has also highlighted Europe's dependence on Russian natural gas for its energy security. Many countries were forced to seek out alternative sources of energy after the war began.
The two-step program will look to stabilize the country's economic situation while the war continues, before turning to 'more ambitious structural reforms' after the end of hostilities, IMF deputy managing director Gita Gopinath said in a statement.
The 48-month Extended Fund Facility approved by the fund's board is worth roughly $15.6 billion.
It forms the IMF's portion of a $115 billion overall support package comprised of debt relief, grants and loans by multilateral and bilateral institutions, the IMF's Ukraine mission chief Gavin Gray told reporters on Friday.
'The goal of Ukraine's new IMF-supported program is to provide an anchor for economic policies - policies that will sustain macroeconomic financial stability and support ... economic recovery,' he said.
Of the total amount approved by the IMF, $2.7 billion is being made available to Ukraine immediately, with the rest of the funds due to be released over the next four years.
The program also includes additional guarantees from some IMF members in the event that active combat continues beyond its current estimate of mid-2024.
If the conflict were to extend into 2025, it would raise Ukraine's financial needs from $115 billion to about $140 billion, Gray said.
'This program has been designed in such a way that it would work even if economic circumstances are considerably worse than ... the current baseline,' he said.