Ukraine state debt almost flat in July

Ukraine’s state debt decreased 0.2% to USD 67.0 bln in July from USD 67.1 bln in the prior month, the Finance Ministry reported on Sept. 5. Local debt decreased 0.7% (by USD 163 mln to USD 22.8 bln) as repayments exceeded issues of local bonds. External debt inched up 0.1% (by USD 42 mln) to USD 44.2 bln owing to a USD 160 mln loan from the European Bank for Reconstruction and Development. In July, the share of external debt slightly increased to 66.0% from 65.8% in the prior month.

Alexander Paraschiy: The lack of progress in securing the IMF tranche kept state debt nearly flat in July. Unless it’s approved, the debt will stay close to the current level through the end of 2016 amid no large external redemptions this year. Nevertheless, we remain optimistic about IMF cooperation and expect the executive board to approve the next wire for Ukraine by the end of September. In which case, up to USD 2.7 bln in loans from Western institutions would be unlocked by the year end, consisting of USD 0.7-1.0 bln from the IMF, USD 1.0 bln from Eurobonds under U.S. guarantees and a EUR 0.6 bln loan from the EU. That would push the state debt up to USD 68.5 bln (81.1% of GDP) by December.