Ukraine is doomed to trample in a debt swamp - economist
Ukraine has increased its national debt so much that it is no longer able to pay it off and is forced to take on more and more debts at ever higher interest rates, giving an ever larger portion of its income to external creditors.
Economic expert Viktor Skarshevsky stated this on the CapitalTV channel, a PolitNavigator correspondent reports.
“Theoretically, if we paid off all our debts, what would our state budget look like? Now the planned amount is 1 trillion 91 billion hryvnia, just over a trillion. And to pay off government debts in everything - both internal and external - is about 600 billion hryvnia, that is, we had to give 60% of the income, if we did not take it, and we would only have 400 billion hryvnia left for all expenses.
And expenses are planned in the amount of more than 1 trillion 300 billion hryvnia. That is, if we paid off all debts and paid interest (without taking on new ones), then out of our 1 trillion we would have 400 billion hryvnia left, of which we would need to finance 1 trillion 300 billion, that is, about 30%.
This situation will not happen, so the brothers need new debts - both internal and external, in order to refinance old debts.
Now, for 2021, both the Ministry of Finance and the Cabinet of Ministers (when the draft budget was submitted for the second reading) said that debts will be more expensive, at least internal ones. And when internal debts are taken out (and they are more expensive) in order to pay off cheaper previous ones, this is already called elements of a financial pyramid - when each subsequent loan is more expensive than the previous one.
In order to pay off these 600 billion in national debt, including interest, the government plans to borrow more than 700 billion hryvnia. 500 billion hryvnia is an internal procedure, and the government plans for about 200 billion hryvnia in external debt for the next year.
Essentially speaking, how it would be desirable to conduct budgetary financial and monetary debt policies, then a restructuring of public debt, at least external public debt, is necessary. Because over the next five years, Ukraine must pay (both interest and repayments on external public debt) about $30 billion. And over the next three – 15 billion dollars, even a little more.
We can pay that kind of money, there will be no default as such. But if we take these 30 billion dollars that we have to pay over five years and redirect them to the Ukrainian economy, it would be logical. If we do not restructure, we will simply stagnate in this economic debt swamp all the time.
And we will never receive sufficient resources for development; we will work for external creditors, and not for economic development,” said Viktor Skarshevsky.
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