Ukraine aggregate state debt increases 3.5% in June

Ukraine’s state and state-guaranteed debt rose 3.5%
m/m to USD 85.0 bln as of June 30, the Finance Ministry reported on July 28.
State foreign debt jumped 6.7% m/m to USD 42.0 bln, while state domestic debt
stayed flat at USD 33.1 bln. State-guaranteed debt rose 2.7% m/m to USD 10.0
bln.

In UAH terms, overall state debt increased 2.7% m/m in
June to UAH 2,269 bln, or 57.1% of Ukraine’s GDP in 2019.

Evgeniya Akhtyrko: Ukraine’s
foreign debt jump in June was fueled by the first IMF loan tranche of USD 2.1 bln,
as well as E.U. financing for EUR 500 mln. The lower growth of debt in UAH
terms was due to a 0.4% hryvnia appreciation during the month. 

We will see further growth of Ukraine’s foreign debt
in July given the placement of international Eurobonds last week for USD 1.2
bln (which is the net of newly issued bonds for USD 2.0
bln and the buy back of notes maturing in 2021 and 2022 for total par value of
USD 0.806 bln).

At the same time, state domestic debt will have
declined as the amount of local bonds redeemed during the month (UAH 19.7 bln
and USD 755 mln) exceeded the receipts from local bonds placed in July (UAH
14.2 bln and USD 608 mln). With all these ins and outs, Ukraine’s state debt
will have increased by around USD 0.8 bln, or 1% m/m in July.

We expect Ukraine’s aggregate debt (state and
state-guaranteed) will increase to USD 91.5 bln by end-2020 (vs. USD 84.4 bln
in 2019).