Ukraine seeks $12bn in new IMF programme

“We will present a Ukrainian draft programme for cooperation with the IMF over the next two an a half years. It's a new programme aimed at supporting economic growth”, Tigipko told reporters.

“I think such a programme might hover around $12bn,” he said.

The ex-Soviet republic of 46 million people, which needs fresh IMF to help its struggling economy recover from the global downturn, has been on a $16.4bn bailout programme from the fund.

But that programme was suspended late last year, after $10.5 worth of credit had been disbursed, because the previous Ukrainian administration reneged on promises of fiscal restraint.

The new leadership of President Viktor Yanukovich has promised the IMF it will put together a 2010 state with a relatively tight deficit of six percent of GDP in exchange for the credit.

That, however, also depends on Ukraine striking a deal with Russia on a new price for huge imports of natural gas which Ukraine needs to fuel its energy-hungry export industries of steel and chemicals.

“I am optimistic in this matter,” Tigipko said, referring to his forthcoming talks with the IMF. “We will do everything to secure an agreed programme with the IMF at the beginning of May. In June perhaps financing will start coming…” he said.

Tigipko said GDP growth in 2010 may exceed the government's “conservative” forecast of 3.7 percent for the year. In 2009, the economy shrank by an estimated 15.1 percent.

Tigipko said the government had to solve the problem of not only the state budget but also that of Naftogaz, the troubled Ukrainian energy giant which is kept financially afloat by state subsidies.

He said if Ukraine and Russia managed to reach an agreement on cutting the gas price this would help significantly to balance the Naftogaz budget.

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