MP from the Opposition bloc Serhiy Lovochkin demands from the Cabinet to solve the problem of the rapid growth of Ukraine’s state debt. He sent the relevant deputy inquiry to Prime Minister Volodymyr Groysman.

“I ask you to take effective steps that would solve the problem of the rapid growth of the state and state-guaranteed debt of Ukraine. I ask you to inform me of the results in the statutory period,” Serhiy Lovochkin emphasized.

The MP recalled that at the beginning of October this year the total amount of the state and state-guaranteed debt of Ukraine exceeded UAH 2 trillion and amounted to more than $77 billion.

“In June of this year, in a deputy inquiry to the government, I stressed the danger of uncontrolled growth of state debt for the stability of the functioning of the domestic economy, since at the beginning of 2017 the ratio of state debt to GDP, which is a universally recognized indicator of security of the debt burden, reached 81%. However, in response from the Ministry of Finance, a formal letter was received that did not contain any specific steps that the department planned to implement with the purpose of correcting the state of affairs,” the MP said.

Serhiy Lovochkin stressed that since then the situation has deteriorated significantly. In particular, in September of this year, the growth rate of the national debt significantly accelerated. In September, it increased in the national currency at once by 4.3% or almost UAH 85 billion. Since the beginning of the year, this indicator in currency has grown by 8.5%, or by $ 6.06 billion.

“As a result, the total debt burden on the economy has increased significantly and, according to the IMF forecast at the end of this year, will grow to 86.2% of GDP. This is much higher than the safe level in 60% of GDP for developed countries and 2 times higher than the ceiling level for developing countries in 40% of GDP,” the politician noted.

According to him, the costs of servicing the state debt also exceed the critical figure. In the current year, expenses for servicing the state debt are planned at the level of 13.2% of the state budget, next year - 13.5%. This significantly exceeds the maximum level for Ukraine, which should not be more than 10% of the budget expenditures.

“In the absence of effective measures by the Cabinet of Ministers, the debt burden problem will continue to deepen, as the government’s steps to issue new, longer Eurobonds and re-profiling of the domestic state bonds allowed only to postpone payments for a longer term, but did not resolve the issue of rapidly growing debt burden,” the MP stressed.

Serhiy Lovochkin recalled that, according to the National Bank, over the next four years Ukraine would be forced to pay more than $ 7 billion to creditors annually, which is almost 1.5 times higher than the current level of gold and foreign exchange reserves.