Page 51 - UKRRptFeb19

Board of Directors of the International Monetary Fund approved the allocation of $ 17.5 billion to Ukraine under the 4-year EFF (Extended Fund Facility) program instead of the SBA program.
Ukraine’s state and state-guaranteed debt rose 0.6% m/m to $74.8bn in November owing to higher foreign debt, the Finance Ministry reported on December 26. State foreign debt rose 3.4% m/m to $38.9bn, while domestic debt declined 2.1% m/m to $26.1bn. State-guaranteed debt declined 2.5% m/m to $9.8bn.
In UAH terms, overall state debt increased 1.4% m/m as state foreign debt rose 4.2% m/m and domestic debt declined 1.3% m/m, respectively. In November, state debt amounted to 71.2% of Ukraine’s 2017 GDP.
The November debt statistics reflected the government borrowing $2bn on October 25 with its international Eurobond placement, as well as its redemption of discount bonds of $725mn par value issued in August.
State domestic debt declined, as the local bond redemption exceeded the amount of newly attracted local debt during the month.
For 2018, we project that state debt will rise to $78.2bn (67.6% of 2018 GDP), assuming loans received this month from the IMF, World Bank and the EU.
Ukraine's gross foreign debt increased 0.9% q/q (or $1.0bn) to $114.7bn as of end-the third quarter of 2018 , the National Bank of Ukraine reported on December 19. Gross foreign debt has dropped 0.6% YTD, currently reaching 102.3% of 2017 GDP in December.
The third quarter of 2018 foreign debt rise was mostly due to the growth of corporate sector debt by $1.0bn. In particular, long-term loans grew $709mn and short-term loans increased $243mn, respectively. In addition, the government's foreign debt increased $161mn to $38.3bn. The central bank’s debt declined $235mn to $6.7bn.
The growth of corporate sector foreign debt is likely to be related to the increased investment activity of Ukrainian business. The increase of government foreign debt in the third quarter of 2018 is the net result of a private placement of $725mn in international discount notes on August 23 and IMF repayments in August.
The major contributions to foreign debt growth in the fourth quarter of 2018 will be related to the placement of 5-10Y Eurobonds for $2bn, as well as loans of around $2.8bn from the IMF, the World Bank and the EU.
At the same time, the foreign debt statistics should reflect the redemption of discount bonds of $725mn par value issued in August and the repayment of IMF debt amounting to around $0.5bn.
Gross foreign debt will reach $118-119bn at the end of the year, or 91% of GDP (vs. 103% of GDP in 2017), according to our estimates.
Ukraine faces a two-year debt payment mountain of $17bn in 2019-2020,
according to a central bank report on financial stability. The National Bank of Ukraine says the only way to avoid default is to stick to the IMF program, which
51 UKRAINE Country Report February 2019 www.intellinews.com