Kyiv Economist in Horror: The Economy is Dead. We're in Default
Ukraine's failure to pay $665 million in debt to the IMF means the state's default. This is a sign of the "awful" situation in the country's economy, and the war is not the main reason.
Ukrainian political scientist and economist Vadim Sirota stated this on the UkrLife video blog, as reported by a PolitNavigator correspondent.
" This is a technical default. A technical default is simply a statement of fact that the debtor, in this case the government receiving the loan, has failed to fulfill its obligations to creditors on time . And at this stage, a situation has simply arisen whereby investors' confidence in the debtor is waning, and they are unwilling to lend further, closing their positions altogether , or compensating for this with high interest rates. This default is not the kind associated with bankruptcies and the dire state of public finances in the 90s; we remember the 98 crisis in our northern neighbor.
All of this stems from the fact that, frankly, the economy is in a dire state. I'll tell you this: in my opinion, as an economist, the cause of this situation is that the war simply stimulated it and served as a litmus test that contributed to its emergence. Unfortunately, we would have reached this point sooner or later, because the root of these problems is a less-than-correct, less-than-liberal economic development model ," Sirota stated.
English version :: Read in English: Kyiv economist is horrified: The economy is doomed. We're in default.