Ukraine's gross state debt expected to top 110% of GDP in 2024 - draft budget

MOSCOW. Sept 18 (Interfax) - Ukraine's gross state debt could exceed 110% of the country's GDP in 2024, Ukrainian media reported, citing a released memo on the government's draft state budget for 2024.

"According to estimates, the forecast amount of the state debt calculated in the national currency will total [UAH8.184 trillion] and will amount to 104.6% of GDP. Debt guaranteed by the state will total [UAH476.672 billion] and will amount to 6.1% of GDP," the document said.

In light of the structure of borrowing this year and its forecast for next year, foreign debt could reach 80% of the total state debt by the end of 2024.

The draft budget assumes that real GDP will grow by 5% in 2024 and nominal GDP will total UAH7.825 trillion, while the exchange rate will average UAH41.40/$1.

The budget plan targets a deficit of UAH1.594 trillion, 20.7% less than the anticipated figure for 2023. The deficit is expected to be financed almost completely with foreign borrowing, as revenue from privatization is expected to total just UAH4 billion, while domestic borrowing will be equal to domestic debt repayments in the amount of UAH421.6 billion.

Ukraine's total government debt grew by 19.3% in the first seven months of 2023 to a new record high of $132.92 billion in dollar terms and to UAH4.861 trillion in hryvnia, which amounted to 76.3% of the GDP that the Economy Ministry's forecast for 2023. The foreign debt amounted to 68.3% of this.

The IMF drastically revised its forecast for the growth of Ukraine's state debt for this year in its first report under the Extended Fund Facility program for the country in June, lowering its projection for the size of the debt to 88.1% of GDP from 98.3%, partly because the estimate for the debt as of the end of 2022 was revised to 78.5% of GDP from 81.7%.

The National Bank of Ukraine (NBU) forecast at the end of July that the state debt would grow from 78.4% of GDP to 84.6% this year, to 96.6% in 2024 and to 98.2% in 2025.

The official exchange rate was UAH36.57/$1 on September 15.