The Ministry of Finance of Ukraine in March raised the forecast for payments on public debt in 2022 by UAH 4.93 billion compared to the March forecast – up to UAH 572.26 billion, according to the forecast for April on the agency’s website.
According to him, the largest amount of payments falls on April-June of this year – UAH 167 billion, while in August-September it is projected at the level of UAH 145.32 billion, in October-December – UAH 124.63 billion.
The Ministry of Finance estimates payments on domestic debt in 2022 at UAH 440.95 billion, and on external debt at UAH 131.32 billion.
According to the Ministry of Finance, on a monthly basis, the largest amount of payments fell on February – UAH 75.78 billion, and May – UAH 69.59 billion.
At the same time, the ministry increased the forecast of payments on public debt in 2023 by UAH 25.71 billion to UAH 400.91 billion.
In 2024, the ministry expects a payment in the amount of UAH 348.74 billion.
The volume of public debt of all countries of the world in 2022 will increase by 9.5% and reach a record high of $71.6 trillion, according to the Sovereign Debt Index study by the British management company Janus Henderson.
In 2021, global public debt rose by 7.8% to $65.4 trillion, with an increase in borrowing observed in all countries covered in the study.
In the meantime, the total cost of servicing the debt has fallen to $1.01 trillion, that is, the actual rate was only 1.6%, according to CNBC research.
In 2022, global public debt service spending is expected to jump 14.5% to $1.16 trillion.
Analysts Janus Henderson believe that the UK will face higher borrowing costs than other countries due to higher interest rates of the Bank of England and a significant amount of government debt with floating rates tied to inflation. Domestic consumer prices jumped 6.2% year-on-year in February, the fastest pace since March 1992.
European countries will also actively place government bonds due to the need to sharply increase government spending on defense in light of the military events in Ukraine, said Bethany Payne, portfolio manager at the company.
The debt of the population of Ukraine for payment of housing and utilities services in December 2021 increased by 12% compared to November and amounted to UAH 73.7 billion (excluding electricity).
According to the State Statistics Service, in general, in December 2021 Ukrainians paid UAH 21.6 billion for housing and utilities services, which amounted to 71.1% of the amount accrued for this month.
The debt for the supplied electricity in September amounted to UAH 7.7 billion.
The highest level of payment for housing and communal services in December 2021 was recorded in Kirovohrad (82.3% of the amount of charges), Odesa (81%), Cherkasy (77.2%) regions.
The lowest level of payment is in Dnipropetrovsk, Luhansk, Chernivtsi regions (66.9% of the amount of charges). In Kyiv, the level of payment was 68%.
According to the State Statistics Service, since the beginning of 2021, some 58,300 agreements have been concluded with the population on the repayment of restructured debt for housing and communal services for a total amount of UAH 531 million. The amount of payments made, taking into account long-term contracts, was UAH 312 million.
The data are given without taking into account the annexed Crimea and Sevastopol, as well as parts of the temporarily occupied territories of Donetsk and Luhansk regions.
Ukraine’s FX payments on public debt will exceed $10 billion in the next 12 months, the National Bank of Ukraine said in its June Financial Stability Report.
“In the next 12 months, only FX payments by the government and the NBU on the state and guaranteed debt will exceed $10 billion. In the hryvnia segment of the market, repayment of principal and interest in the second half of the year will exceed UAH 130 billion,” the central bank said on its website.
The regulator said that the schedule of debt payments in the next three years remains tight. However, the load is distributed relatively evenly, which should not create significant problems for the Ministry of Finance, although the average volume of auctions should still grow.
According to the report, the financing needs may be mitigated by the additional issue of special drawing rights (SDRs) in the amount of $650 billion being discussed by the International Monetary Fund (IMF) to support the global economic recovery.
“If the IMF Executive Board approves the decision, Ukraine will increase its FX reserves by about $2.7 billion, the NBU said in the report.
The total public debt of Ukraine in April 2021 increased by 1.29% in U.S. dollars to $91.33 billion and by 0.8% in hryvnias, to UAH 2.534 trillion, according to data on the website of the Ministry of Finance, released on Wednesday.
According to the Ministry of Finance, direct public debt in April this year in U.S. dollars grew by 1.53%, to $81.37 billion, in hryvnias – by 1.04%, to UAH 2.258 trillion.
External direct debt in the past month in U.S. dollars rose by 3.89%, to $45.12 billion (in hryvnias growth was 3.38%, to UAH 1.251 trillion).
The state-guaranteed debt in April in U.S. dollars decreased 0.7% to $9.95 billion, in hryvnias decreased 1.17%, to UAH 276.25 billion, according to the ministry’s data.
According to them, since the beginning of the year, the total national debt of Ukraine has grown by 1.19% in U.S. dollars and by 18.33% in hryvnias.
According to the Ministry of Finance, the share of liabilities in U.S. dollars of the total structure of public debt in April increased to 36.15%, in euros – to 13.68%, in SDR – to 13.54%, while in hryvnias it decreased to 36.02% , while in the yen it remained at the same level – 0.6%.
The official exchange rate, at which the Ministry of Finance calculates the debt, strengthened to UAH 27.75/$1 in April compared to UAH 27.88/$1 in March.
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.