The power continues to establish new debt “records”. Only for September, the total (state and guaranteed by the state) state debt grew by UAH 84.7 billion at once and exceeded a record UAH 2 trillion.
The increase in state debt was due to the placement of Eurobonds worth $ 3 billion. But these loans were lent not to revive the Ukrainian economy and create new work places. Out of this money, $ 1.6 billion went to repurchase restructured bonds maturing in 2019-20, while the rest - to increase the new public debt with a longer maturity.
The power has not developed an effective strategy for managing public debt, which is able to give an answer - how Ukraine can cope with the excessive debt burden, which constrains the country’s development and causes permanent macro-financial risks. Such a document simply does not exist, and the latter was adopted back in 2013.
As a result, the level of state debt continues to increase rapidly and in absolute and relative terms: since the beginning of this year, gross state debt has increased by UAH 113.2 billion, and totally in the current government (March 2014 - September 2017), the state debt has grown 3 times in hryvnia or by UAH 1 360 billion (from 683 to 2043 billion). This is UAH 31.6 billion per month or more (!) than UAH1 billion a day.
The level of state debt to GDP has been growing at an enormous rate. In 2013, the level of national debt to GDP was 40%. At the beginning of 2017 - 81%. This is much higher the safe level of 60% of GDP for developed countries and twice higher the ceiling level for developing countries of 40% of GDP.
The IMF predicts that at the end of the year the ratio of state debt to GDP will amount 86.2%. This is the worst indicator of debt burden among all post-Soviet countries. Belarus has 58.8%, Armenia - 55.8%, Poland - 54.2%.
Expenditures for servicing the state debt have already exceeded critical for Ukraine 10% of all budget expenditures. This year, these requirements are provided for - 10.5% of the consolidated and 13.2% of the state budget.
The lack of professionalism of the power has led to the fact that each Ukrainian already has got more than UAH 48 000 of the national debt, and this amount continues to increase.
Urgent measures are necessary to correct the situation. A strategy for managing the state debt for the medium and long term should be adopted, in which, among other things, it is necessary to envisage mechanisms for developing a deep and liquid domestic borrowing market, reducing the currency risks of the national debt, increasing the sample of funds for development loans of the World Bank, EBRD, EIB, IFC, etc. The state debt can be reduced only by restarting the economy.
The Opposition bloc has repeatedly proved its ability to raise the economy from its knees and ensure economic growth. It is urgently necessary to take a number of priority steps: adopt a program to restore industry, increase exports, increase investment attraction and create work places.
This is an agenda that can be implemented only in one way - through the re-election of the parliament and the change of the entire state-management vertical. This is the issue of survival of Ukraine as a state.Follow @serhiylovochkin