To avert Ukraine's bankruptcy, the International Monetary Fund announced on Thursday of its pledge to loan up to $18 billion for the crisis-hit country and its escalating standoff with Russia, the Associated Press reported.
Arseniy Yatsenyuk, Ukraine's prime minister, forecast more trouble ahead without reform and warned that his country was "on the brink of the economic and financial bankruptcy."
Claiming that the whole country would be affected, he "laid out details for fixes needed to put the country back on track, including raising taxes, a freeze on minimum wage and radically higher energy prices," the AP reported.
"We have no choice but to tell Ukraine the truth," Yatsenyuk said.
Since the decision of moving away from having any closer relations to the EU was taken, months of protests were ignited in the county. This was followed by the ouster of President Viktor Yanukovych in February.
A semblance of normalcy has not been retained in the country since then.
"Ukraine's macroeconomic imbalances became unsustainable over the past year," the IMF said, warning that the country "faces difficult challenges."
Growth has drastically been slowed down due to the recent economic policies, prompting foreign currency reserves to a "critically low level," the IMF said.
"In a statement issued after two weeks of talks with officials in the Ukrainian capital, Kiev, the IMF said loans could range between $14 billion and $18 billion," the AP reported. "It said a more exact sum would only be determined, however, when authorities give a more precise assessment of their needs."
Conditional on the conclusion of an IMF bailout and reform package, Ukraine has been promised help from other donors such as the European Union and Japan.
In the next two years, the country will receive $27 billion in help.
"Separately, the 28-nation EU has prepared a wider aid package including loans and grants for Ukraine expected to total more than $10 billion over the coming years," the AP reported.
However in order to avoid default, the Finance Ministry of Ukraine will need $35 billion, it said.
