The public and guaranteed debt of Ukraine after growth last year from 50.3% of GDP to 60.8% of GDP in 2021 will decrease to 55.8% of GDP, this updated forecast is contained in the inflation report of the National Bank of Ukraine (NBU).
“Compliance with a balanced fiscal policy in the context of economic growth and low exchange rate volatility will allow to resume the decline in the level of government and government-guaranteed debt, as well as keep it below 60% of GDP,” the NBU said.
According to its estimates, in the first two months of 2021, the debt has already decreased to 58.4% of GDP, amounting to UAH 2.55 trillion in absolute terms (36.5% in national currency and 63.5% in foreign currency).
The National Bank said that in 2021 the government will still maintain a significant budget deficit (according to NBU estimates 4% of GDP, UAH 200.2 billion) to revive the economy and overcome the pandemic.
“However, in the future, in the context of sustainable economic growth, government incentives will decrease, which will gradually improve the debt position. Accordingly, in 2022-2023, the deficit is expected to decrease to 3% of GDP (UAH 165 billion in 2022 and UAH 181.9 billion in 2023),” the bank said in the report.
According to it, the National Bank does not expect financing of NJSC Naftogaz Ukrainy and additional capitalization of state-owned banks in the next three years. The volume of government guarantees, according to its estimates, will decrease from UAH 80 billion in 2021 to UAH 34.4 billion in 2022 and UAH 36.8 billion in 2023.
