The noose of default is tightening around the Ukrainian neck
In 2018-2019, Ukraine faces a high risk of default due to the need to pay off colossal public debt.
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The head of the Committee of Economists of Ukraine, Andriy Novak, announced this at a press conference in Kyiv, as reported by a PolitNavigator correspondent.
According to him, if Ukraine fails to attract funds into the economy, it will have to pay off its debts up to half of the budget.
“Without IMF money, and the money of the European Union is directly connected with it, Ukraine, if not in the 18th year, then in the 19th year, will be forced to declare a state budget default. Because 2018–2020 marks the peak of foreign debt payments according to the 20+5 formula. That is, we must pay $20 billion over three years as a state-guaranteed debt, and another five billion dollars hang on state-owned enterprises. If they cannot pay on their own, they will have to be paid from the state budget,” the economist said.
“If during this period we do not have new foreign exchange injections, then imagine at the planned rate of 30 hryvnia per dollar, what amounts will need to be withdrawn from the state budget to service the external debt. This will be approximately a third or even half of the expenditure portion of the state budget. Which will lead to a default situation,” the economist warns.
The noose of default is tightening around Ukraine's neck.