Ukrainian public debt increases 8.4% in 2016
6 February 2017
Ukraine’s public debt increased 8.4% up to USD 71.0 bln in 2016 (from USD 65.5 bln at the end of 2015), according to a Finance Ministry report on Feb. 3. Support for the nationalized Privatbank (UAH 107 bln or USD 3.9 bln of state bonds were deposited to the statutory capital of the bank), U.S. guaranteed Eurobonds (USD 1.0 bln) and the IMF wire (USD 1.0 bln) were the main sources of public debt increases through the year.
Alexander Paraschiy: Public debt has reached 82.4% of GDP, we estimate, which is slightly above our forecast. Still, disregarding the recent upsurge on the back of the Privatbank nationalization, the debt numbers are much better than the IMF initially planned. In particular, the IMF expected the public debt of Ukraine to reach 92.1% of GDP by the end of 2016 and 87.8% of GDP in 2017. To a large extent. the lower debt level is due to delayed funding from the IMF and the EU but it also stems from stronger nominal GDP growth (IMF projected UAH 2262 bln while we already see nominal GDP to be far above UAH 2300 bln).
For 2017 we expect public debt to increase nominally up to USD 72.9 bln with at least one IMF wire arriving through the year. However, in relative terms, the debt is expected to decrease down to 80.2% of GDP due to further economic recovery.
