Page 43 - UKRRptSept20

6.2 ​Debt
Ukraine aggregate state debt stays flat in July​. ​Ukraine’s state and state-guaranteed debt amounted to $85.0bn as of July 31 without undergoing statistically significant month-to changes, the Finance Ministry reported on August 26.
State foreign debt jumped 2.8% m/m to $43.1bn, while state domestic debt declined 4.0% m/m to $31.7bn. State-guaranteed debt rose 2.2% m/m to $10.2bn.
In UAH terms, overall state debt increased 3.8% m/m in July to UAH2,355bn, or 59.3% of Ukraine’s GDP in 2019.
“Ukraine’s foreign debt jump in July was fueled by the ​placement of international Eurobonds for $1.2bn​ (which is the net of newly issued bonds for $2.0bn and the buy-back of notes maturing in 2021 and 2022 for a total par value of $0.806bn).
At the same time, state domestic debt declined as the amount of local bonds redeemed during the month exceeded the receipts from local bonds placed in July. In addition, a 3.6% hryvnia depreciation decreased the value of UAH-denominated debt in $ terms.
The state debt will have declined slightly in August as the amount of local bonds redeemed during the month (UAH23.8bn and $474mn) exceeded the receipts from local bonds placed in August (UAH16.9bn and $250mn).
“We expect Ukraine's aggregate debt (state and state-guaranteed) to increase to $91.5bn by end-2020 (vs. $84.4bn in 2019),” Evgeniya Akhtyrko of Concorde Capital said in a note.
7.0​ FX
The Ministry of Economic Development, Trade and Agriculture of Ukraine forecast ​this year an average annual rate of UAH 27/$1 (previously UAH 29.50/$1 was expected), and at the end of the year – UAH 28.3 / $.
Remittances of Ukraine’s labour migrants were down 8.5% in June y/y,
falling to $856mn, reports the National Bank of Ukraine. After a strong start to the year, remittance fell sharply in in April and May, ending the down by 4% for the first half of this year. After food exports, labour remittances are the second largest source of income for Ukraine. Through banks, private channels and international payment systems Ukrainians sent home at least $1bn a month last year.
Sandwiched between Guatemala and the Philippines, Ukraine has the world’s second most dependent economy on remittances from overseas workers, ​The Wall Street Journal reports, citing World Bank statistics. In a recent story headlined Developing World Losesbns in Money From Migrant Workers, the Journal reports the remittances last year accounted for 11% of Ukraine’s economy, compared to 13% for Guatemala and 10% for the Philippines.
43​ UKRAINE Country Report​ September 2020 ​ ​www.intellinews.com