Ukraine gross external debt rises 0.5% in 1Q12
22 June 2012
Ukraine’s gross external debt increased 0.5% qoq in 1Q12 to USD 126.9 bln. Banks repaid net USD 1.1 bln of their external liabilities last quarter but those redemptions were more than offset with USD 1.7 bln in net borrowings by the non-financial sector. Short-term external debt (both public and private) due within 12 months stood at USD 56.8 bln as of end-1Q12 (up 6% qoq).
Vitaliy Vavryshchuk: The 1Q12 data on external debt are broadly positive – they imply external debt rollover stood above 100% for the private sector. We expect much of the same trend in the remainder of 2012: debt inflows to the non-financial sector (mainly from related companies) should exceed external debt repayments by banks. At the same time, we doubt the government will be able to keep its gross external debt unchanged: markets are not supportive of a new Eurobond issuance and offsetting redemptions of sovereign debt with new borrowings will be a challenge. Overall, we see Ukraine’s gross external debt remaining virtually unchanged through end-2012 at about USD 128-130 bln but it is expected to shrink relative to GDP to 69% by end-2012 from 76% as of end-2011.
