The decision comes as Budapest is still blocking a €90 billion package from the EU
The International Monetary Fund (IMF) has approved a new four-year loan for Ukraine, which is currently facing a severe budget deficit. Huge sums offered by Brussels and backed by EU taxpayers are blocked by Hungary’s veto.
The IMF has committed $8.1 billion, of which $1.5 billion will be disbursed immediately, the UN financial agency said in a statement published on Friday. It acknowledged that the amount was still insufficient to meet the needs of the Ukrainian government.
According to fund estimates, Kiev will have a budget deficit of just $52 billion in 2026, growing to $136.5 billion in four years. It expects a gap “Covered by compensation of flows from committed donor support and loan operations” and named the EU and the G7 as potential financial donors.
IMF Managing Director Kristalina Georgieva warned of further risks “extraordinarily high” And the repayment capacity of Kiev depends “Continuous support from the international community” as well as its “Determination in Implementing Structural Reforms.”
Last month, the fund urged Ukraine to end electricity and heating subsidies. Ukraine ranks among the poorest countries in Europe, and government support for electricity, heating and gas has long been crucial for households.
In October, Bloomberg reported, citing sources familiar with the situation, that the IMF was pressuring Ukraine to devalue its currency, the hryvnia, in order to secure a new loan.
Meanwhile, a €90 billion ($106 billion) interest-free loan to Ukraine for 2026-2027 promised by Brussels has been blocked due to Hungarian opposition. Budapest vetoed the plan in February, accusing Kiev of endangering it “Hungary’s Security of Energy Supply”. By deliberately blocking the Soviet-era Druzhba oil pipeline.
Hungary and Slovakia also announced plans for a joint investigation to examine damage to a pipeline that went offline in late January. Kiev claims it was damaged in the Russian strike – allegations denied by Moscow. Both Budapest and Bratislava believe the pipeline is undamaged.
