Ukraine state debt drops 0.1% m/m in November

Макроэкономика 30.12.2013 Ukraine’s state debt was almost unchanged, decreasing 0.1% m/m (USD 94 mln) in November to USD 68.7 bln, or 38.2% of GDP, according to Finance Ministry data released on Dec. 27. External debt fell USD 1.2 bln (-3.2% m/m) while internal debt grew USD 1.1 bln (+3.3% m/m). As a consequence, the share of internal debt of total debt increased to 49.0% vs. 47.4% a month ago. Alexander Paraschiy: IMF repayments (USD 955 mln) and a USD-denominated bond placement (USD 822 mln) were the main factors that determined public debt dynamics throughout the month. Despite the modest debt decrease over the last few months, we still anticipate the state debt to approach 40% of GDP by the end of December owing to the recent USD 3.0 bln Eurobond placement and active internal bond sales in December (UAH 9.4 bln by Dec. 24). In regard to 2014 public debt prospects, we expect the debt stock to keep growing actively on the back of internal and external borrowing for the sake of heavy state deficit funding (at nearly 6% of GDP), mainly for social payments. By December 2014, we project public debt to reach USD 84 bln, which is more than 43% of the GDP we estimate for 2014.