WASHINGTON—Ukraine must resolve outstanding budget issues before the International Monetary Fund gives the green light on the next payout of bailout cash, the IMF said Saturday as it further cut its economic outlook for the conflict-beleaguered nation.

IMF mission chief Nikolay Gueorguiev said Kiev’s pro-West government had reached agreement with the IMF on most of the budget and policy overhauls needed to complete the latest review of the emergency loan program.

“However,...