The payment of $ 450 million to the International Monetary Fund last week is the beginning of a new stage when Ukraine will give more than take debts. According to the MP from the OPPOSITION BLOC Serhiy Lovochkin, the policy of life in debt has exhausted itself and requires correction.
“Life reserves in debt are exhausted. This year Ukraine has taken $ 1 billion from the IMF, and it is necessary to give $ 1.1 billion. The country began to work for servicing and payment of public debt. In 2017 UAH 241 billion will be spent for these purposes, that is 30% of all state budget expenditures. However, later it will be worse: for just three years, ending 2019, payments on foreign debts will amount to $ 14 billion – with gold reserves of the National Bank of 18 billion at the beginning of July. This is more than sufficient argument to understand the need to adjust the economic course,” Serhiy Lovochkin believes.
However, according to the politician, the authorities continue the policy of increasing debts. According to the results of the first half of 2017, Ukraine already owes $ 75 billion – 4 billion more than on January 1. In terms of each citizen of Ukraine – from babies to pensioners – the public debt increased from UAH 45,213 to UAH 46,083. If we take into account only officially employed worker, then each of them, with the current average salary, should work more than a year and a half solely for the payment of state debt.
“The main indicator that characterizes the state’s ability to serve is the ratio of the national debt to GDP. For developing countries, it should not exceed 40%. Anything higher is a risk zone. In Ukraine, at the beginning of the year, this indicator was 81%. Obviously, the policy of living in debt has brought the country into a deadlock. It must be replaced by the policy of economic development and attraction of foreign investments. There is no other recipe,” Serhiy Lovochkin stated.Follow @serhiylovochkin