Page 46 - Eastern Europe Outlook 2020

● Budget
The Verkhovna Rada passed the budget bill in November that has a deficit of 2.09% of GDP.
The plan for financing the national budget in 2020 announced by the government in the draft budget envisages borrowing on the foreign market in the amount of $4.9bn and on the internal market in the amount of UAH231.1bn (around $8.4bn).
The international borrowing is slightly up from the $4.2bn of international borrowing planned for 2019, whereas the borrowing on the domestic market is significantly more and possible after the local capital market was hooked up to the Clearstream international settlement system in 2019.
The amount of payments on public debt in 2020 is estimated at UAH282.1bn of repayment of the principal amount and UAH141.5bn of interest payments. Another UAH12bn is planned to be raised through privatisation.
Since the beginning of 2019, the total public debt of Ukraine declined from 60.9% of GDP to 51.2% of GDP in September, although in US dollar terms it grew from $78.3bn to $83bn.
The share of debt in the hryvnia during this time increased from 33% to 40%, and in US dollars decreased from 48% to 42%. The debt in euros increased from 9% to 11%.
● Incomes, debt and unemployment
The IMF says Ukraine’s economic growth is too low to noticeably close the income gap with Ukraine’s neighbours.
"Per capita GDP (in PPP terms) in Ukraine is still very low - just 20% of the EU average, the second lowest level of all Central and Eastern European countries," an IMF statement read.
Real wages in Ukraine grew 9.8% y/y in September, accelerating from a 7.7%
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