Ukraine public debt increases 1.3% in March

Ukraine’s state debt increased 1.3% m/m (UAH 6.9 bln) in March to UAH 538.9 bln, according to Finance Ministry data released on April 24. Internal debt remained the key factor, adding UAH 8.8 bln (3.9% m/m) to the debt stock. At the same time, external debt declined 0.6% m/m (UAH 1.8 bln). By the end of March, external debt accounted for 56.2% of the public debt, decreasing slightly from February (57.3%).

Alexander Paraschiy: Exchange rate fluctuations, and in particular SDR weakening, in March were the main reasons for the external debt decline throughout the month. At the same time, internal debt increased on the back of state bond placements (UAH 12.2 bln) and an estimated UAH 2.0 bln in sales of local state bonds by Naftogaz of Ukraine (who received them earlier as a part of an UAH 8.0 bln capital injection). We estimate the current state debt at 37.7% of GDP, which is above our expectations for the year’s end. Provisionally, we expect the year-end public debt to be close to 37% of GDP.