Ukraine state debt reaches 64% of GDP in September
31 October 2014
Ukraine’s USD-denominated state debt in September increased 6.9% m/m (USD 4.8 bln) to USD 74.3 bln, according to MinFin data released on Oct. 30. External debt increased 4.3% (USD 1.7 bln) while internal debt grew 10.3% (USD 3 bln) through the month. The share of external debt declined to 56.2% from 57.5% in the prior month.
Alexander Paraschiy: A second wire from the IMF (USD 1.4 bln), a new World Bank loan (USD 500 mln) as well as loans from the Canadian export agency and the Japanese government were the main sources of external liabilities growth. At the same time, internal debt continued expanding on the back of Naftogaz refunding (UAH 27.7 bln). By the end of September, state debt already reached 64% of GDP, we estimate.
Despite the strong September increase , we expect state debt expansion will slow down in the upcoming months. In particular, a USD 1.6 bln Eurobonds redemption in October will reduce Ukraine’s liabilities while there won’t be any more Naftogaz refunding. Definitely, there will be more external borrowings through November-December. However, we do not expect the new loans to be much more than USD 1.5 bln (we anticipate a USD 1 bln Eurobonds placement under U.S. government guarantees by the year end). Against this backdrop, we are keeping our forecast for state debt at 65.4% of GDP in 2014.
