Ukraine state debt drops 1% in October

Ukraine’s state debt dropped 1.0%, or USD 745 mln, to
USD 76.3 bln in October on the back of a USD 446.6 mln repayment to Gazprombank
and in line with 1.1% hryvnia depreciation throughout the month. External debt
dropped 1.3% in USD and 0.1% in UAH terms. Local debt dropped 0.4% in USD terms
but increased in UAH terms by 0.8% on the back of a UAH 1.65 bln local bond
placements.

The share of external debt dropped to 64.6% from 64.8%
in September.

Alexander Paraschiy: We do not
expect any interntational loans arriving to Ukraine over the remaining weeks of
2017. The IMF made it clear that a natural gas price adjustment is needed to
move forward. The European Commission also confirmed officially that it will
not wire the last EUR 600 mln under the current macro-financial assistance
(MFA) program. Meanwhile, the IMF redemptions that have been already paid (USD
358 mln in November and USD 159 mln in December) were covered by a local
Eurobond placement.

All in all, we expect state debt to stay near the
current level at USD 76.3 bln (76.3% of GDP) till the year end. For 2018, we
project the state debt will rise to USD 78.6 bln (69.8% of GDP) assuming
cooperation with the IMF is maintained.