Page 42 - UKRRptJun20

appreciation to UAH26.97/$as of April 30.
In May, state foreign debt will have declined, given the redemption of US-guaranteed Eurobonds of $1bn planned for May 29. At the same time, state domestic debt will have risen around $1.7bn as the amount of newly attracted domestic debt will exceed redemptions during the month. With all the ins and outs, Ukraine state debt is likely to have gained around 1% m/m in May.
For 2020, Ukraine’s state debt will surge given the needs ​in financing the ever-swelling budget deficit​ amid corona-crisis challenges. We expect Ukraine's aggregate debt (state and state-guaranteed debt) will increase to $91.5bn by end-2020 (vs. $84.4bn in 2019).
7.0​ FX
Worker remittances will drop 17% this year, to $10bn, ​calculates the National Bank of Ukraine. Despite the $2bn drop, labour will remain Ukraine’s second largest export, after food. The World Bank estimates that Ukrainian workers sent home $15bn in 2019 – the equivalent of 10% of the nation’s GDP .
Due to the coronavirus scare, at least 12.5% of the estimated 1mn Ukrainians working in Poland came home, ​Polish experts estimated at a recent Polish-Ukrainian webinar: “Migration and Remittances.” As a result, Ukrainian labour migrants may transfer 30% less money from Poland to Ukraine this year, predicted Lukasz Kozlowski, chief economist of the Polish Federation of Entrepreneurs. During the first quarter, remittances were up 7% y/y to almost $3bn, reports the central bank. In mid-March, the government encouraged Ukrainians working abroad to come home, warning that Ukraine’s borders were closing. Ukrainians send into Ukraine almost 20 times the volume of money they send out -- $154mn in Q1, the bank reports on its Facebook page.
The NBU and EBRD have agreed to set up a USD 0.5bn FX swap ​facility to support the real economy. FX swap transactions are to secure reliable access to hryvnia liquidity and help the NBU increase its reserves.
42​ UKRAINE Country Report​ June 2020 ​ ​www.intellinews.com