IMF mission to return to Kyiv in March

A mission from the International Monetary Fund (IMF) is planning to return to Kyiv in March of 2013 to continue discussions on a stand-by arrangement, a statement by IMF Mission Chief for Ukraine Christopher Jarvis regarding the completion of the work of the mission, which visited Ukraine from January 29 to February 12, said, UKRINFORM news agency reports.

"We have made significant progress toward reaching understandings with the authorities on policies, which will bring down the budget and current account deficits, strengthen reserves and create jobs and growth. Important policy issues remain outstanding, and further technical work needs to be completed. We expect the mission to return to Kyiv in March to continue the discussions," the statement reads.

According to Jarvis, Ukraine faces serious challenges. "Economic activity sharply slowed down in the second half of 2012 as a result of deteriorating trade conditions and uncertainties in global financial markets. Also in 2012 the current account deficit widened rapidly, and the fiscal accounts deteriorated," the statement reads.

At the same time, large subsidies on gas and heating for households continue to undermine Ukraine's budget and its balance of payments. "In the absence of corrective policies our forecast for 2013 is growth of 0-1 percent and a high current account deficit that leaves Ukraine vulnerable to shocks," Jarvis said.