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Ukraine: IMF Declines Comment On Yushchenko's Remarks

Washington, 20 November 1996 (RFE/RL) - Officials at the International Monetary Fund (IMF) declined to comment yesterday on Ukrainian Central Bank Governor Victor Yushchenko's remarks that the IMF will accept a higher budget deficit next year if the government will push a deregulation and tax cut package through parliament.

In an interview with the "London Financial Times," Yushchenko is quoted as saying that IMF officials will accept a 1997 Ukrainian budget deficit of four percent of gross domestic product rather than the 2.3 percent target of this year as part of the reform package attached to a three-year extended facility loan from the fund.

Ukraine is currently in the final months of a regular one-year stand-by loan from the fund and has been negotiating a longer extended credit of around $3 billion to be finalized by next February. IMF officials will say only that the fund and Ukraine are "working toward that end."

IMF Managing Director Michel Camdessus personally talked with Ukrainian President Leonid Kuchma by telephone last week, but details of their discussions were not revealed.

Yushchenko said the aim of the plan with the IMF is to create the conditions for growth in a low-savings, high interest-rate economy. He said the government would draw up a deregulatory package affecting about 97 laws, including making business registration simpler and closing tax loopholes. He said Ukraine will need another $1 billion next year in external finance which it hopes to get from other Western organizations and nations.