Ukraine gross external debt reached 96% of GDP by end-2014

Макроэкономика 23.03.2015 Ukraine’s gross external debt fell 11.1% (USD 15.8 bln) in 2014 to USD 126.3 bln, or 96.5% of GDP as of Jan. 1, 2015, according to a National Bank of Ukraine (NBU) report on March 20. Short-term external debt declined 5.2% to USD 55.1 bln in 2014, including USD 27.1 bln in long-term debt maturing throughout the year. The main debt contraction was related to trade credits (reduced by USD 9.4 bln) and long-term loans in other sectors, which fell USD 5.7 bln. Deleveraging occurred in the banking sector, in which debt fell by USD 3.8 bln. At the same time, state external debt rose USD 3.0 bln. By the end of 2014, state and guaranteed debt reached 70.3% of GDP. Alexander Paraschiy: In 2014, IFI support was the only source of capital inflow as private sources of financing were unavailable. In particular, Ukraine received USD 4.6 bln from the IMF, EUR 1.6 bln from the EU, USD 1.3 bln from the World Bank, USD 1.0 bln from Eurobonds (under U.S. state guarantees), USD 0.2 mln from Canada and USD 0.1 mln from Japan. We anticipate this trend to preserve itself for 2015, with trade credits falling in line with further contracting imports and with private investment absent. We anticipate stronger support from IFIs on the back of a strengthened reforms process. The recent appointment of a new quality of bureaucrats within the Cabinet leadership lays the grounds for optimism in this sphere. Against this backdrop, we project gross external debt growing to USD 131.4 bln by the end of 2015.