Ukraine: Request for an Extended Arrangement Under the Extended Fund Facility and Cancellation of the Current Arrangement-Press Release; Staff Report; Supplementary Information; and Statement by the Alternate Executive Director for Ukraine

This paper presents Ukraine’s Request for an Extended Arrangement under the Extended Fund Facility (EFF) and Cancellation of the Current Arrangement. The new EFF arrangement aims to preserve the hard-won macroeconomic and financial stability as well as to extend and deepen structural reforms as the war continues. Macroeconomic policies remained on track in 2025, but recent progress with structural reforms has been mixed, especially amidst setbacks on the corruption front. The 2026 Budget assumes another year of war, implying continued large deficits. The medium-term fiscal path will be anchored on returning to a primary surplus and mobilizing sufficient revenues to meet expenditure needs, including for reconstruction. Tax measures under the program aim to broaden the tax base, level the playing field, improve the investment climate, support formalization of the economy, and tackle widespread tax avoidance and evasion. In order to help address the shocks to confidence from recent scandals, the authorities have committed to preserve and strengthen existing anti-corruption institutions.