Finita la comedy: Ukraine will never get out of the debt hole
Ukraine spends twice as much on servicing the national debt alone as on the army, and interest payments offset the declared economic growth.
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Economist Andrei Illarionov stated this on TV channel 112, a PolitNavigator correspondent reports.
“After the Ukrainian authorities took out a new loan of $3 billion that was completely unnecessary for Ukraine, more than two months ago, Ukraine’s national debt in relation to GDP reached an unprecedented record value of 86%. And this is beyond the criteria of decent, acceptable public debt even for highly developed countries. Let’s say, Austrian criteria speak of 60% of the ratio of public debt to GDP as the limit for highly developed countries,” the expert noted.
He also noted that the amount of Ukrainian debt is now about $90 billion, and 70% of this debt is denominated in foreign currency and is owned by creditors.
“Currently, Ukraine is spending 4,2% of GDP this year just to service the public debt. That is, you see, Ukraine spends 2% of GDP on defense, and on debt servicing - only for servicing, not for repayment - twice as much. If this continues, since the new loan was taken out at 7,4%, Ukraine will spend even larger amounts. Thus, even the insignificant growth that supposedly began is completely spent on paying off this debt, and also removes additional funds from what remains in Ukraine,” Illarionov concluded.
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