Ukraine gross foreign debt rises 0.9% in 3Q18

Ukraine’s gross foreign debt increased 0.9% qoq (or
USD 1.0 bln) to USD 114.7 bln as of end-3Q18, the National Bank of Ukraine
reported on Dec. 19. Gross foreign debt has dropped 0.6% YTD, currently
reaching 102.3% of 2017 GDP.

The 3Q18 foreign debt rise was mostly due to the
growth of corporate sector debt by USD 1.0 bln. In particular, long-term loans
grew USD 709 mln and short-term loans increased USD 243 mln, respectively. In
addition, the government’s foreign debt increased USD 161 mln to USD 38.3 bln.
The central bank’s debt declined USD 235 mln to USD 6.7 bln.

Evgeniya Akhtyrko: The growth
of corporate sector foreign debt is likely to be related to the increased
investment activity of Ukrainian business. The increase of government foreign
debt in 3Q18 is the net result of a private placement of USD 725 mln in international discount notes on Aug. 23 and
IMF repayments in August.

The major contributions to foreign debt growth in 4Q18
will be related to the placement of 5-10Y Eurobonds for USD 2 bln,
as well as loans of around USD 2.8 bln from the IMF, the World Bank
and the EU.

At the same time, the foreign debt statistics should
reflect the redemption of discount bonds of USD 725 mln
par value issued in August  and the repayment of IMF debt amounting to
around USD 0.5 bln.

Gross foreign debt will reach USD 118-119 bln at the end
of the year, or 91% of GDP (vs. 103% of GDP in 2017), according to our
estimates.