Ukraine public debt declines 1% in May

Ukraine’s public debt declined 1.0% m-o-m (USD 655 mln) in May to UAH 68.6 bln, according to MinFin data released on June 25. An external debt drop of USD 1.5 bln (-3.8% mom) was the main factor, while internal debt increased USD 827 mln (+2.8% mom). By the end of May, external debt accounted for 54.9% of public debt.

Alexander Paraschiy: As we expected, public debt fell on the back of a USD 1.3 bln IMF debt redemption. At the same time, due to active domestic state bonds placements (USD 1.2 bln in May) and poor GDP performance, the state debt stayed above 38% of GDP by the end of May. In this respect and in view of continued active state bonds issuing, we are keeping our forecast for public debt at 38% GDP in 2013 and envisaging the possibility for an upward revision in case budget revenue keeps worsening at the fast pace it’s on now.