Ukraine gross foreign debt flat at USD 116 bln in 1Q18

Ukraine’s gross
foreign debt slid 0.2% YTD (or USD 288 mln) to USD 116.3 bln as of end-1Q18, the National Bank of Ukraine
reported on June 19. Gross foreign debt is now at 103.7% of 2017 GDP.

Throughout 1Q18,
foreign debt of the government rose USD 267 mln to USD 39.2 bln, while the
biggest decline happened in long-term
trade credits of the corporate sector, which decreased by USD 1.1 bln to USD 0.1
bln.

Evgeniya Akhtyrko: Long-term trade credits of the
corporate sector have been declining since 3Q17. However, the dramatic drop to
an almost insignificant level of USD 99 mln in 1Q18 was unforeseen. This drop
was not compensated by short-term trade credits, which increased only USD 53
mln to USD 1.3 bln in 1Q18. This trend might point to impeded access of
Ukraine’s corporate sector to external financing amid growing country risks in
the eyes of foreign partners.

We expect Ukraine gross foreign debt to increase by around USD 6 bln by the end
of 2018, assuming up to USD 3.4 bln in loans from the IMF, the EU and the World
Bank, as well as a Eurobond placement for USD 2.5 bln. That said, the gross
foreign debt will end up at around 104% of our projected 2018 GDP, keeping the
same ratio as at the end of 2017.