The acting administration is closing the debt grip of the nation by offering to increase the public debt-to-GDP ratio in 2022. This was stated by MP Serhiy Lovochkin commenting on the draft bill of the state budget for the next year that has been introduced in the parliament by the Cabinet.
The politician said the public debt-to-GDP ratio is expected to reach 56 percent by the end of 2021, but the bill proposes to increase it to 57.6 percent in 2022.
“This is the way to sliding deeper into the debt abyss. The World Bank recommends that developing economies do not get higher than the 40-percent threshold with their public debts, but the last time Ukraine’s public debt kept up with these recommendations was in 2013. Since then, the situation has deteriorated, mostly after the 2014–2015 and 2020 crises,” Lovochkin said.
The MP noted that almost 575 billion hryvnia are to be spent on the public debt and its management in 2022, which compares to 45.3 percent of all state budget income.
“The debt management alone will take up 181.4 billion hryvnia from the budget, which is by 34 percent more than the entire amount for economy support as provided by the government. This is the key problem: if the economy development is not a priority, the GDP will grow very slowly at best, and the debt burden will continue increasing. Reversing the trend is only possible by dramatic revision of budget expenses in favor of the economy support. This is the only way for state budget income to grow faster than the public debt management expenses, and for the nation to have additional funds for social expenses,” Lovochkin summed up.