Ukraine seeks fresh IMF loans as industrial output plummets

 
Ben Southwood
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THE INTERNATIONAL Monetary Fund (IMF) is this month sending a mission to Ukraine to discuss a new loan package, after the former Soviet republic was hit with collapsing industrial activity.

The IMF confirmed it would send a team on 29 January, after deputy prime minister Serhiy Arbuzov said the country wanted around $15bn (£9.4bn) credit earlier this week.

IMF loans had previously been halted after the government refused to reduce energy subsidies, fearing a public backlash. This raises the prospect that similar issues will prove a sticking point in the new deal, with analysts sceptical about the possibility of an agreement in the forthcoming talks.

“I don’t think we should necessarily think that the mission will conclude with an agreement as negotiations are likely to be very, very tough,” said Standard Bank’s Timothy Ash.

The new package comes as Ukrainian industrial output collapsed 7.6 per cent over the year to December, according to official statistics out yesterday.

This plunge came after the steel-dominated sector enjoyed a 7.6 per cent climb in industrial production last year.