Ukraine: IMF assumes Kiev will get $15.4bn from creditor talks

The International Monetary Fund's rescue programme for war-torn Ukraine reportedly assumes that Kiev will be able to secure $15.4bn (£10.2bn, €14.2bn) from talks with its international creditors.

The assumption is necessary to ensure that Ukraine's sovereign debt falls to 70% of GDP by 2020, a level the IMF will deem sustainable, Reuters reported.

Pursued by the news agency, an IMF spokeswoman was not immediately available for comment.

The IMF is expected to approve Ukraine's new aid package on 11 March, after Kiev passed a new draft budget last week to help it bag the deal.

Under its rules, the Fund cannot lend to countries unless it believes they will be able to repay in due course.

Targeting a particular level for debt renegotiation, considering that debt talks have not yet begun, points to the uncertainty surrounding the $40bn funding package announced for Ukraine last month, including an IMF bailout of $17.5bn.

Last month, the IMF refused to share details of the financing package, and said it had not made any assumptions about a debt restructuring for private creditors.

Ukraine's Finance Minister Natalia Yaresko has also said the government expects to obtain $15bn from talks with holders of its sovereign bonds, and that discussions should begin after the IMF deal goes through.

Meanwhile, investment firm Rothschild has invited investors to organise a Ukraine creditor group ahead of the talks, which are expected to be difficult given Ukraine's ongoing war, the news agency reported.

Battered economy

Ukraine's GDP plunged 15.2% year-on-year in the fourth-quarter of 2014, official data showed on 17 February.

The GDP fell by 3.8% from the third quarter, according to data from the Ukrainian statistics service.

The data excluded the Crimean peninsula, annexed by Russia, and areas where military operations were under way, the statistics office said.

Ukraine's economy has been battered by almost a year of war and political turmoil, hitting industries hard and pushing the former Soviet republic towards bankruptcy.