Public debt rises 4% in 1Q10

Ukraine’s Finance Ministry reported yesterday that total government debt rose 4% over 1Q10 to USD 41.3 bln, or 34.6% of GDP. Mykyta Mykhaylychenko: On one account, the government increased domestic direct UAH debt by USD 2.2 bln (19%) to close the fiscal gap in 1Q10. On top of that, the Finance Ministry now also includes USD 1.9 bln (~1.5% of GDP) in SDRs, received from the IMF in August 2009 and September 2009 into direct public debt. In our view, the economic essence of the SDRs suggests they should not be included in the debt category. Hence, excluding these SDRs, Ukraine’s public debt now stands at 33% of GDP and we project it to be at 43% by yearend.