Feb. 6 (Bloomberg) -- The International Monetary Fund said it is in talks with Ukraine to relax conditions attached to last year’s $16.4 billion loan that required the country to balance its budget by 2009.

In a statement, the IMF mission chief to the country, Ceyla Pazarbasioglu, said that the “sharper-than-expected contraction in economic activity requires a recalibration of economic policies.”

“In particular, the IMF team and the authorities have discussed potential revisions to the program’s balanced budget target for 2009,” she said in a statement released by e-mail.

To contact the reporters on this story: Christopher Swann in Washington at cswann1@bloomberg.net.

Last Updated: February 6, 2009 17:37 EST