Public debt increases to 35% of GDP

Ukraine’s Finance Ministry reported yesterday that as of end-July, total public debt reached USD 45.9 bln (+6.3% from June) or ~35% of GDP. Mykyta Mykhaylychenko: The increase stemmed from the first USD 1.9 bln tranche from the IMF, USD 1 bln of which went directly to the government to cover fiscal deficit financing, while the central bank got the rest. By year-end, Ukraine is scheduled to receive the next USD 1.5 bln tranche (again USD 1 bln directly to the government) and, hence, to fully repay a USD 2 bln short-term “bridge” loan from Russia’s VTB. We see public debt reaching some USD 52 bln or ~39% of GDP by end-2010 vs. 34.8% as of end-2009.