Ukraine state debt almost unchanged in January

Ukraine’s state debt increased 0.2% m/m (USD 148.2 mln) in January to USD 73.2 bln, according to Finance Ministry data released on Feb. 26. External debt declined 0.5% (USD 180.7 mln) while internal debt grew 0.9% (USD 328.8 mln) through the month. By the end of January, the share of external debt decreased to 51.0% from 51.4% a month ago.

Alexander Paraschiy: A UAH 1.8 bln state mortgage institution bonds placement was the main reason for minor state debt increase. At the same time, internal borrowings (UAH 5.3 bln) were almost totally offset by UAH 4.5 bln in internal redemptions. Due to some technical peculiarity, the January state debt figure did not reflect a USD 650 mln payment to the IMF. However, we will see all wires to the IMF (USD 1.0 bln was due by Feb. 12) in the February statistics, which promise a substantial public debt decrease.

In light of the serious problems with fiscal accounts and external accounts, we anticipate the new Cabinet will start borrowing actively soon. Against this backdrop, we are keeping our forecast for the state debt reaching 44% of GDP by the end of 2014 (39.8% of GDP by the end of January).