Ukraine risks losing vital international budget support as delays in reforms continue to hinder the fulfillment of commitments to the International Monetary Fund (IMF) and the European Union (EU). This is the main finding of the latest Monitoring of the IMF Program and EU Assistance Conditions within the Ukraine Facility, published by the #RRR4U consortium.
Government Program Misses Key Reform Benchmarks
“Ukraine’s new government program lacks several indicators agreed upon with Western partners,” said Roman Nitsovych, Research Director at DiXi Group.
“The need to cover expenditures through international support programs—many of which depend on progress in reforms—remains very acute. At the same time, the reforms themselves are essential for maintaining economic resilience,” he added.
According to Maria Repko, Deputy Executive Director at the Centre for Economic Strategy, even though the current IMF program included “very light benchmarks,” some of them remain unfulfilled.
“The next IMF program is likely to be frontloaded—with most funds disbursed upfront. This gives the Fund more leverage to set stricter conditions from the start,” she noted.
As of the end of September, only six of nine structural benchmarks under the ninth IMF program review have been completed. Four were implemented on time, two with delays, while two remain unfulfilled.
Ukraine Facility: Missed Indicators and Financial Risks
Vitalii Nabok, Analyst at the Institute of Analytics and Advocacy, reported that Ukraine failed to meet eight indicators under the Ukraine Plan, which forms the basis for EU financial support.
“The European Commission has approved changes to the Ukraine Facility and forwarded them to the EU Council. Given the close coordination with EU institutions, there is every reason to believe the updated plan will be endorsed,” he said.
However, implementation of the reform remains behind schedule. Unmet commitments include the expansion of the High Anti-Corruption Court’s staff, reforms to the territorial organization of executive power, and the digitalization of enforcement proceedings.
“If further indicators are delayed—particularly those tied to the reform of public investment management and climate commitments under the Paris Agreement—Ukraine could face even greater financial losses,” warned Nabok.
Nitsovych added that delayed reforms directly threaten budget financing:
“By the end of this year, Ukraine still needs to attract $8.7 billion to fund all planned expenditures. In 2026, external borrowing is expected to cover 42.3% of total spending—yet not all inflows are secured by confirmed sources.”
Capital Market Reform: Foundation for Private Investment
A significant part of the discussion focused on rebuilding Ukraine’s capital market as a source of long-term private financing.
“Ukraine’s reconstruction needs exceed €500 billion, and international aid alone cannot meet this demand,” said Oleksandra Betliy, Leading Expert at the Institute for Economic Research and Policy Consulting (IER). “We need to attract private capital through transparent and predictable instruments—and for that, a functioning capital market is essential.”
The current IMF program calls for strengthening the National Securities and Stock Market Commission (NSSMC) and addressing market gaps that prevent foreign investment. It includes six key reform steps, such as developing a roadmap for financial market reform and aligning Ukrainian standards with EU regulations.
In June, the Financial Stability Council approved an updated Financial Sector Development Strategy, and in July, the NBU, NSSMC, Ministry of Finance, Ministry of Economy, and EBRD signed a Memorandum on creating integrated capital market infrastructure in Ukraine.
“The memorandum is already being implemented—Ukraine’s depository has been transferred to the NBU, and international investors are expected to participate in developing market infrastructure,” Betliy said.
“Ukraine Must Build Its Own Investment Path”
Experts agree that Ukraine must create trusted, long-term investment tools—such as municipal, green, and mortgage bonds, as well as private and venture funds.
“We must prepare for local IPOs once peace comes. Our companies have few risk-hedging tools, but war-risk insurance options are gradually emerging with government support,” Betliy noted.
According to Andrii Suprun from the National Bank of Ukraine, the new holding company—comprising international and domestic partners—will establish a new stock exchange to improve liquidity and attract global players like Nasdaq or Deutsche Börse.
“If such global institutions become shareholders of Ukraine’s market infrastructure, it would bring a tremendous boost in expertise, technology, and investment,” Suprun said.
Investors Need Assets, Capital, and Trust
Serhii Budkin, Co-founder and Managing Partner at FinPoint Investment Advisors, summarized the prerequisites for capital market growth:
“To develop a market, you need a place to trade, something to trade, and money to trade with. Ukraine has the first, is lacking the second, and is just beginning to build the third.”
He estimated that $1.2 billion in foreign capital currently shows interest in Ukraine but warned about weak minority shareholder protection:
“If you own less than 25–40% of a company, you have virtually no rights. Strengthening minority protection is essential.”
Political and Institutional Bottlenecks
Some speakers were critical of existing regulatory institutions.
Yaroslav Zheleznyak, First Deputy Chair of the Parliamentary Committee on Finance, Tax, and Customs Policy, argued:
“The NSSMC, in its current form, is absolutely ineffective. Its functions should have been transferred to the National Bank during the financial ‘split.’”
Oleksandr Parashchiy, Head of Research at Concorde Capital, identified three main reasons Ukraine lacks a functioning stock market:
- No investable assets
- No capital for investment
- No rule of law—hence no investor trust.
“Companies ready for investment prefer New York or Warsaw, where they get better valuation and protection,” Parashchiy said.
Oleh Klimas, Head of Capital Markets at Raiffeisen Bank, added:
“War and currency restrictions keep foreign investors out. Rapid EU integration will be key to improving the competitiveness of Ukrainian issuers.”
About RRR4U
#RRR4U (Resilience, Reconstruction and Relief for Ukraine) is a consortium of four Ukrainian civil society organizations: the Centre for Economic Strategy, the Institute for Economic Research and Policy Consulting (IER), the Institute of Analytics and Advocacy (IAA), and DiXi Group. The consortium conducts independent monitoring of Ukraine’s commitments to international partners and promotes transparency in reconstruction and reform processes.
