Finance Minister of Ukraine Oksana Markarova has said that in two years Ukraine seeks to cut state debt to 40% of GDP and will strive for deficit-free budget in the future. She said on the Freedom of Speech by Savik Shuster program on the Ukraina TV Channel last week that permanent restructuring of state deb is unfavorable, as it would give the country fewer resources today than reputation losses.
“Ukraine has always been very unpredictable. We rapidly increased our debt from 2006 to 2008, then it also grew rapidly from 2013 to 2014, because it was in foreign currency, because in 2013, three billion in foreign currency was borrowed. We need to move away from this. That is, now we are again reducing debt compared with GDP, and this year it is less than 60%,” Markarova said.
The finance minister said that for 2020 the goal is to reduce public debt to 52% of GDP, and “in two years to reach even 40%.” “This will give us the opportunity of living like European countries: when they need development, they borrow money, when they do not need it, they do not borrow. Because debt in itself is not bad, it is bad when we take a debt and live on it,” she said.
Markarova said that therefore, next year the budget deficit will be only 2% of GDP, this year it is 3.2%. “That is, we will constantly try to come to a budget without deficits, and this will give us the opportunity of absolutely resolving all our debt issues and direct the money we earn to important and priority issues,” she said.
The minister also assured that the Ukrainian authorities constantly communicate with international partners, investors and gives all the information about what the country is going to do. “For the first time last year we adopted a debt strategy and now we are constantly telling how we will reduce this debt,” the finance minister said.
State debt of Ukraine from 2009 till 2019 (mln UAH)
State debt of ukraine from 2009 till 2019 (mln uah)
The aggregate state (direct) and state-guaranteed debt of Ukraine in December 2018 increased by 4.77%, or by $3.56 billion, to $78.32 billion, according to the website of the Ministry of Finance. In the national currency the state debt rose by 2.17% or UAH 46.15 billion, to UAH 2.169 trillion. In 2018, the total state (direct) and state-guaranteed debt in U.S. dollar terms increased by 2.46%, or by $2.02 billion, in hryvnias – by 1.26%, or by UAH 26.95 billion.
The Finance Ministry said that the public debt in December increased by 0.8%, to UAH 1.86 trillion (in U.S. dollars it increased by 3.36% to $67.19 billion), while the external debt decreased by 0.47%, to UAH 1.099 trillion (in U.S. dollars increased by 2.05%, to $39.71 billion).
In December 2018, state-guaranteed debt grew by 11.32%, to UAH 308.13 billion (in U.S. dollars it increased by 14.15%, to $11.13 billion), including external debt by 12.22% to UAH 297.81 billion (in U.S. dollars by 15.07%, to $10.76 billion).
The ministry also reported that the principal amount of public debt is denominated in U.S. dollars, 43.96%, another 29.13% in hryvnia, 16.59% in special drawing rights (SDR), and 9.21% in euros. In addition, less than 1% of government debt is denominated in Canadian dollars and yen.
The official hryvnia exchange rate, according to which the Ministry of Finance calculates the debt, in December strengthened to UAH 27.69/$1 from UAH 28.39/$1, or by 2.47%, whereas by the end of 2017 it was UAH 28.07/$1.
The aggregate state (direct) and state-guaranteed debt of Ukraine in October 2018 decreased by 0.46%, or by $0.34 billion, to $74.32 billion, according to the website of the Ministry of Finance. In the national currency the state debt fell by 0.93% or UAH 19.69 billion, to UAH 2.093 trillion.
Since the beginning of the year, the total state (direct) and state-guaranteed debt in U.S. dollar terms has decreased by 2.61%, or by $1.99 billion, in hryvnias – by 2.27%, or by UAH 48.6 billion.
The Finance Ministry said that the public debt in October decreased by 0.88%, to UAH 1.811 trillion (in U.S. dollars it decreased by 0.41% to $64.32 billion), while the external debt decreased by 1.02%, to UAH 1.06 trillion (in U.S. dollars decreased by 0.55%, to $37.65 billion).
Last month state-guaranteed debt fell by 1.28%, to UAH 281.65 billion (in U.S. dollars it decreased by 0.81% to $10 billion), including external debt by 1.35% to UAH 269.34 billion (in U.S. dollars decreased by 0.89%, to $9.56 billion).
The ministry also reported that the principal amount of public debt is denominated in U.S. dollars, 44.06%, another 30.18% in hryvnia, 16.21% in special drawing rights (SDR), and 8.39% in euros. In addition, less than 1% of government debt is denominated in Canadian dollars and yen.
The official hryvnia exchange rate, according to which the Ministry of Finance calculates the debt, in October improved to UAH 28.16/$1 from UAH 28.30/$, or by 0.47%, whereas by the end of 2017 it was UAH 28.07/$1.
