Ukraine is preparing to submit proposals to the International Monetary Fund to reduce subsidies to state gas company Naftogaz without raising tariffs for the population, Deputy Prime Minister Yuriy Boyko was quoted as saying on Thursday.
Ukraine
is
preparing to submit proposals to the International Monetary Fund to reduce
subsidies to state gas company Naftogaz without raising tariffs for the
population, Deputy Prime Minister Yuriy Boyko was quoted as saying on Thursday.
"We have found a model that will allow us, without touching the socially
unprotected layers of population, to offer a model for the IMF that will allow
us to show that we will reduce the deficit of Naftogaz Ukrainy," the
official said, Interfax-Ukraine reported.
Analysts say
Ukraine
needs
IMF financing as it struggles with a recession and a wide current account
deficit. It also needs to pay more than $10 billion to service
foreign-currency-denominated debt to the end of 2014.
Ukraine
hasn't had any IMF financing since 2010, when a $15 billion program was halted
after the government failed to raise household gas prices.
Mr. Boyko said the new measures will open up
Ukraine
's gas
market to private companies from the East and the West, without elaborating.
The latest IMF mission visited
Ukraine
on
Oct. 17-29 to assess its macroeconomic situation. The mission concluded that
"
Ukraine
's
significant external financing needs remain a key vulnerability" for its
economy and made a number of recommendations that would help to unlock IMF
financing for the former Soviet republic.
In particular, it said
Ukraine
needs
increased exchange rate flexibility combined with policies to strengthen the
financial sector; ambitious fiscal consolidation; increases in domestic energy
tariffs, and comprehensive structural reforms to improve the business climate
and support growth.
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