KIEV, Dec. 8 – Prime Minister Yulia Tymoshenko’s foreign policy chief was in Washington Monday trying to persuade leaders of the International Monetary Fund to unlock its $16.4 billion lifeline to Ukraine as deep budget crisis looms ahead.
The IMF, which disbursed at least $10.6 billion to Ukraine over the past 12 months, suspended the loan in November after the government failed to deliver promised economic reforms.
Deputy Prime Minister Hryhoriy Nemyria “held consultations with the leadership of the IMF concerning the disbursement of the next installment,” his press service reported Tuesday.
The visit underscores financial problems the government faces this year as Ukraine depends on the borrowing for making foreign debt payments and also for sustaining budget spending.
The government, which has been so far collecting about 15 billion hryvnias or less every month, needs to collect about 60 billion hryvnias in December to meet the 2009 budget revenue forecast.
“It’s the moment of truth,” Serhiy Liamets, an analyst with Ekonomichna Pravda business publication, said. “There is simply nowhere for the government to get so much money from.”
Tymoshenko said on Monday she hopes Ukraine can get the next $3.4 billion installment - worth 27.2 billion hryvnias - from the IMF within the next three weeks, while Nemyria’s visit to Washington is aimed at securing the money.
Nemyria “assured [IMF leaders] that further successful cooperation with the IMF is extremely important for Ukraine,” the press service reported. “This would allow our country to gradually and confidently pull out of the crisis.”
The developments come as the government has resorted to a controversial trick with budget statistics in November by counting some of the IMF money received earlier this year as legitimate budget revenue.
The trick allowed the government to report it had raised 31.3 billion hryvnias in November alone, which is twice as much as it had been on average collecting monthly so far this year.
The statistics give an impression that the Tymoshenko government has successfully managed to deal with severe economic crisis by mobilizing domestic resources.
No other government in Ukraine has ever used such a trick before. Viktor Pynzenyk, a former finance minister who quit the government in February after a dispute with Tymoshenko over widening budget deficit, said it was unacceptable.
Pynzenyk estimated the government probably runs a hidden budget deficit of about 88 billion hryvnias in 2009, which is much higher than 31 billion hryvnias that has been officially forecast.
The government, desperate for the money, may put further pressure on state businesses for getting early tax payments - a trick used throughout 2009 - and may also increase pressure on the National Bank of Ukraine for printing extra money, analysts said.
The government borrowed 42 billion hryvnias from the NBU by forcing the central bank to buy its Treasury bills this year, according to President Viktor Yushchenko. (tl/ez)