World Bank considers new loan for Ukraine

A delegation of the World Bank will arrive in Ukraine to discuss conditions for granting a loan for program financing. A visit of a WB delegation in connection with a stand-by loan program, which provides for transferring credit tranches not on a regular basis but only at a special request by a country, is also expected in June. The Ukrainian government's press service reported to RBC that real progress had been made during negotiations on issues that determine strategic cooperation between Ukraine and the World Bank. Macroeconomic stability is maintained in Ukraine. Economic growth rate exceeded 7 percent over the first four months of this year amid low inflation. The parliament has approved the government's program, including a tax reform.

The government has implemented measures necessary for resolving questions that are important for international financial organizations. A bill that provides for minimizing the VAT rate and canceling any VAT discounts will be submitted to the parliament for consideration in June 2003. The State Tax Administration has confirmed the fulfillment of the obligation to decrease the arrears for VAT reimbursements for exporters by $94.3m during the first six months of this year. Amendments to the 2003 budget, which were passed on the first reading last week, provide for realistic financing of the decision to set the minimum wage at $34.90. An independent audit of the Naftogaz Ukrainy company has been completed in accordance with the World Bank's Terms of Reference.

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