Ukraine public debt decreased 0.6% mom (USD 383 mln) in June down to UAH 68.2 bln, according to MinFin data released on July 26. The defining factor was an external debt decline of USD 936 mln (-2.5% mom) while internal debt increased USD 554 mln (+1.8% mom). By the end of June, external debt accounted for 53.9% of public debt. Alexander Paraschiy: A 2003 Eurobond redemption worth USD 1.0 bln was the main reason for public debt decline in June. At the same time, MinFin actively raised money domestically (+UAH 4.4 bln) to cover the growing budget deficit. We expect the general public debt to resume growth by at least 0.5% mom in July due to active internal borrowings. By July 29, MinFin raised domestically UAH 10.8 bln for the month. Yet even UAH 5.3 bln in internal redemptions coupled with a USD 400 mln IMF payment will not offset active borrowing during the month. The tough situation with budget revenues makes us revise our public debt forecast. Naftogaz of Ukraine’s approved financial plan (with its deficit swelled by UAH 10.7 bln) and continued declines in state collections indicate a need for additional net borrowing of nearly UAH 40 bln in 2H13. Such new loans will push the public debt up to 39.5% of GDP by the year end.