Ukraine's state debt grows by 4% in Jan-May, shrinks 0.3% in May

MOSCOW. June 26 (Interfax) - Ukraine's total government debt shrank by 0.3% to $150.99 billion in dollar terms in May after reaching a new all-time high of $151.52 billion in April, but in the national currency it grew by 1.7% to a record UAH6.115 trillion amid the depreciation of the hryvnia, Ukrainian media reported, citing the Finance Ministry.

The foreign state debt grew by $0.52 billion or 0.5% to $108.89 billion in May, which amounted to 72% of the total debt.

In the first five months of 2024, the government debt grew by $5.68 billion or 3.9% in dollar terms and by UAH595.8 billion or 10.8% in hryvnia.

At the end of May, 33.81% of the debt was in euros, 26.29% in U.S. dollars, 25.41% in hryvnia and 10.73% in Special Drawing Rights, the ministry said.

The ministry also said that 68.05% of the state debt has a fixed interest rate, 10.73% is linked to the IMF rate, 9.10% to the SOFR, 4.72% to the National Bank of Ukraine's discount rate, 4.07% to the EURIBOR and 2.37% to the consumer price index.

Ukraine's total state debt grew by $33.9 billion or 30.4% in 2023 after increasing by $13.4 billion in 2022.

The International Monetary Fund said recently that Ukraine's state debt needs "deep treatments." IMF materials do not directly mention the desirability of a partial debt write-off, but the Fund said Ukraine needs to reduce its state debt to 82% of GDP by 2028 and to 65% of GDP in 2033. Additional restructuring targets mentioned, besides reducing the debt to 82% of GDP, also include cutting spending on foreign debt servicing to 1-1.8% of GDP.

The official exchange rate was UAH40.65/$1 on June 26.