“What’s up with the economy?” is a weekly podcast by the Centre for Economic Strategy in collaboration with Hromadske Radio and supported by PrivatBank.
Hosts Anhelina Zavadetska and Maksym Samoiliuk speak with experts, entrepreneurs, analysts, and government officials about the current state of Ukraine’s economy.
In the new episode, we discuss the newly approved IMF financing programme for Ukraine, the catalytic role of the Fund, and the global economy under conditions of high uncertainty, geopolitical fragmentation, the Middle East war, tariffs, China’s role, and risks of a new financial crisis.
The guest of the episode is Vladyslav RashkovanAlternate Executive Director at the International Monetary Fund.
We have summarised the main points of the conversation:
Why is the new IMF programme so important for Ukraine?
Rashkovan said that the IMF remains the only organisation that can provide immediate help when Ukraine faces problems — other donors follow only after the Fund gives its “diagnosis”. The new $8.1 billion programme (with $1.5 billion already disbursed) continues the previous one and has a strong catalytic effect: it unlocks additional financing from partners for the next four years (estimated need — $136.5 billion if the war continues). Ukraine has already received $172.5 billion in budget support since 2022 (according to Vladyslav Rashkovan). Cooperation with the IMF is unusual because the Fund changed four internal policies to finance countries during active wars — Ukraine is the first such case.
Vladyslav Rashkovan emphasizes:
«When Ukraine has problems, there is no other organization besides the IMF that comes to the aid. All others come after this… When the IMF says ‘this country needs help’, countries in different parts of the world start moving..The IMF changed four internal policies to allow financing countries during active war. Ukraine is the first case… We understand that if the war continues longer, it will require $136.5 billion over the next four years».
Uncertainty has become the new global norm
The world will not return to the era of predictability, explains Rashkovan. Since 2008 global trade as a share of GDP has been declining; we are moving toward bloc-based rather than truly international trade. This fragmentation, plus climate change, demographic shifts, and wars (first in Ukraine, now in the Middle East), is reducing potential global GDP and making everyone poorer. Tariffs and Trump’s unpredictable policy add to uncertainty, but actual average US tariffs (14 %) turned out much lower than the worst-case scenarios.
Vladislav highlights new trends:
«Uncertainty is becoming the new norm… The world will not return to the era of predictability. We are moving toward bloc-based rather than truly international trade».
How is the Middle East war affecting energy markets and the global economy?
The main channel is uncertainty plus real disruptions: blocked shipping lanes, halted oil and Qatari gas supplies, rapidly filling storage, and forced production cuts. Oil prices are rising, which benefits Russia. IMF forecasts had to be recalculated again. The war is large-scale and affects many countries.
Europe’s problems: low competitiveness and strategic autonomy
Vladyslav Rashkovan notes that Europe lags behind the US in productivity, company scale, and ability to grow start-ups (they all move to Silicon Valley). The single market is unfinished — no unified capital or energy market, excessive regulation, and national egoism. Europe actively discusses strategic autonomy from China (and possibly from the US as well), but experts and policymakers agree that full decoupling remains unrealistic because global trade and the principle of comparative advantage continue to play a crucial role.
«I recently spoke at conference in Brussels and said: friends, sorry, but when the German central bank prohibits an Italian financial group from buying a German bank — precisely with the logic that Italians are buying a German bank — this looks like nonsense to me. In the world that is the European Union today, this is nonsense. They have created a labor market — yes. But they have not completed the single capital market. In fact, there is still no single energy market. These are still national companies, not multinational European companies»– said Vladyslav Rashkovan
AI boom, fiscal stimuli, and the risk of a new financial crisis
Rashkovan notes that the private sector proved very flexible after COVID. The US growth in late 2024 was almost entirely driven by AI-related investments (data centres). This is positive but creates bubble risks similar to the dot-com crisis. Fiscal stimuli and growing state role in many countries also add distortions. The IMF insists sustainable growth must come from the private sector, not the state.
The conversation ends with a discussion of less-public but critical risks and how all these global shifts directly affect Ukraine’s economy and future financing needs.
Describing the situation in the U.S., Vladyslav Rashkovan says:
«When external economists analyzed the US economy, they showed that almost all growth in the fourth quarter of last year was investments in data centers and everything around artificial intelligence. This also fuels the markets. Although at the same time it creates risks for the markets. If experts believe that there is some bubble in this market, it could lead to a potential crisis, as happened at the beginning of the 2000s—during the dot-com crisis».
US vs China: Debt Challenges and What Each Needs to Do
The US has experienced explosive debt growth due to its import-heavy model reliant on dollar printing and borrowing — a trend the IMF has long flagged as problematic. Treasury Secretary Scott Bessent views this trajectory as an existential risk, so the US needs to reshore production, reduce import dependency, and curb excessive debt accumulation.
China, after 25–30 years of export- and state-investment-led growth, now grapples with a severe real-estate crisis fueled by heavy state financing over the past 10–15 years. To rebalance its economy and mitigate structural vulnerabilities, China must shift toward boosting domestic demand.
«The growth of US debt is very large. The IMF has long said that this could be a problem… Scott Bessent sees even an existential risk in this… And China needs to increase domestic demand… we know the problems with the real-estate market in China, which has been heavily financed by the state over the last 10–15 years»explains Vladyslav Rashkovan
