The IMF Executive Board has completed the first review of Ukraine's Extended Fund Facility (EFF), clearing the way for a $690mn disbursement that will lift total financing under the programme to $2.2bn, Ukraine's Ministry of Finance said on July 21. However, the this years budget is still short some $20bn to cover inflated war costs.

Ukraine met all quantitative performance criteria and indicative targets set for the end of March, and the two sides agreed an updated timetable for structural reforms and additional measures to keep the programme on track, the ministry said.

As IntelliNews reported in April, the $690mn tranche had been at risk after Kyiv failed to complete any of the three structural benchmarks set for the first quarter, including a stalled tax reform package that is part of Ukraine’s EU accession bid, amid political resistance to unpopular tax measures and slow progress filling senior government posts. The EU opened the first cluster negotions last month, but is not expected to become a member of the EU for a decade.

“The successful completion of the first review under the new EFF arrangement is an important confirmation of the resilience of Ukraine’s financial system,” said Finance Minister Sergii Marchenko. “We continue implementing the reforms necessary to preserve macrofinancial stability, mobilise domestic resources, and create the conditions for Ukraine’s recovery and European integration.”

The IMF Executive Board approved the new four-year, $8.1bn EFF arrangement for Ukraine on February 26, IntelliNews reported when the staff-level deal was struck in November. Ukraine received a first, unconditional tranche of $1.5bn in March. With the second disbursement now cleared, total IMF financing provided since the start of the full-scale invasion will reach $15.6bn, making the Fund the third-largest provider of financial assistance to Ukraine over that period.

The programme's priorities include ensuring fiscal sustainability, mobilising domestic revenue and advancing tax and customs reforms, with particular attention to reducing the shadow economy and combating tax evasion, the ministry said.

The IMF funding comes on top of the €90bn EU Ukraine Support Loan  agreed in December 2025 for 2026–2027, as well as a proposed €89bn Ukraine reserve in the EU’s Multiannual Financial Framework (MFF) 2028–2034 budget.

However, Kyiv’s immediate military needs have risen sharply. Parliament in June added UAH1.56tn ($34.7bn) to the 2026 security and defence budget, lifting total planned spending to a record UAH4.37tn ($97.2bn), from an earlier forecast of about $64bn. Even after including €28.3bn of defence funding from the EU loan, a European Commission assessment estimated that Ukraine still faced a €19.6bn military funding gap in 2026, against total defence requirements of €134.6bn.

The IMF’s latest review projects the underlying government deficit, excluding foreign budget-support grants, at about 21% of GDP, higher than envisaged in the original budget, although the Fund says the programme remains fully financed under its current assumptions.