Ukraine external debt decreases to 76% of GDP in 2Q13

Ukraine’s gross external debt decreased 1.4% (USD 1.9 bln) in 2Q13 to USD 134.4 bln, or 75.7% of GDP as of July 1, according to the National Bank of Ukraine. Short-term external debt declined 1.7% to USD 62.1 bln in 2Q13, including USD 28.6 bln in long-term debt maturing through the year.

Alexander Paraschiy: Both private sector and state organs have been paying back their debts throughout the quarter. In particular, the NBU repaid USD 717 mln and the state repaid USD 403 mln. The banking sector also returned USD 617 mln.

We expect the external debt to decrease further in 2013 in view of the government’s difficulties with external borrowing and its large total debt payments. For the second half, for example, a USD 2.9 bln redemption to the IMF is due while so far only USD 750 mln in external loans have been attracted from abroad. At such rates, we anticipate gross external debt to decline to USD 131 bln, or 74% of GDP, by the year end.