LONDON, 5 November. /Corr. Igor Brovarnik, Ilya Dmitriev/. Ukraine’s public debt will continue to grow by the end of this year and will reach 90-100% of GDP. This is stated in the report released by the European Bank for reconstruction and development (EBRD) regional economic prospects.
“Public and publicly guaranteed debt of Ukraine has increased dramatically from 41 per cent in 2013 to 71 per cent of GDP in 2014, and is projected to continue to grow to 90-100% of GDP by the end of 2015 on the background of the impact of the exchange rate, economic recession and lower lending,” – said the experts of the Bank.
However, they noted that “on an annual basis as of September 2015, the inflation in Ukraine amounted to 51.9% of”.
“Undermining industrial production and export capacity in the Donbass, and also a significant net outflow of funds puts pressure on the national currency and the economic reserves. The hryvnia from January 2014 to October 2015 lost about 63% of its value against the U.S. dollar,” reads the report.
As stated in the study, official reserve assets (international reserves) Central Bank of Ukraine “decreased from $17.8 bn in January 2014 to $5.6 billion by February 2015, but by September 2015, their reserves grew to approximately $12.8 billion, largely thanks to financial aid.”
According to the report, in 2014 the General government deficit of “Naftogaz” has increased to about 10% of GDP (from 6.7% in 2013). The aggregate size of the deficit is expected to reach 7% of GDP in 2015.
“The government of Ukraine has moved quickly to fulfill the conditions of the IMF for approval of the enhanced cooperation program, designed for 4 years (assumes $40 billion). To close the deficit of external financing of Ukraine’s IMF program provides for the restructuring of sovereign Eurobonds of Ukraine to achieve savings of $15 billion in 2015-2018, to stabilize the public debt”, – noted in the Bank.
When the expected growth of Ukraine’s economy
The forecast of falling of economy of Ukraine adjusted to 11.5% for the year, but in 2016 it is expected to grow, stated in the report of EBRD.
“The near term Outlook for Ukraine depends on internal and external factors. There is cautious hope that the economy has bottomed out in mid-2015, and what level of performance stabilished in the second half of the year, despite domestic and regional risks remain real,” – noted the experts of the Bank.
“We lower our forecast of Ukraine’s GDP growth to 11.5 per cent (previous forecast in may to 7.5%), however, the projected growth of Ukrainian economy in 2016 by 2%”, – stated in the report.
EBRD also notes that the fall of Ukraine’s GDP in the first and second blocks (2015) compared to the same periods of 2014 was 17.2% and 14.6% respectively. Last year, a drop of Ukrainian GDP of Ukraine was recorded at 6.8%.
The deficit of current account decreased significantly from 9.2% of GDP in 2013 and to approximately 4.7% of GDP in 2014, and is expected not to exceed in 2015 to 2% of GDP, reported in the EBRD.