Ukraine's state debt in 2014 will increase by Hr 219.6 billion, or 37.6%, to Hr 804 billion, or from 40.2% of gross domestic product (GDP) to 52.7% of GDP, the Ministry of Finance has forecast. "The debt, without taking into account changes in the hryvnia exchange rate, could amount to Hr 674.7 billion, the debt to GDP ratio under these conditions would be 44.2%," the Finance Ministry reported in the assessment of policy in the field of public debt, posted on its Web site, without specifying the forecast exchange rate.
The ministry clarifies that the direct state debt is expected to increase from UAH 480.2 billion to Hr 664 billion, and the guaranteed one – from Hr 104.2 billion to Hr 140 billion.
According to the document, at the end of 2013 some 43.3% of the state debt was denominated in the national currency, while that in U.S. dollars accounted for 43.9%, SDR – 9.1%, euros – 3.4%, and Japanese yen – 0.3%.
The authority said that in addition to Hr 129.3 billion of the increase in the debt through the hryvnia devaluation, its growth will be facilitated by the capitalization of National Joint-Stock Company Naftogaz Ukrainy (Hr 33.3 billion), the debt financing of the national budget deficit (Hr 68 billion), and the capitalization of banks (Hr 5.2 billion).
According to the document, payments on the public debt in the current year will increase compared to the previous year by 39.2%, to Hr 155.2 billion, or from 27.6% of the budget expenditures to 35.5%. In particular the cost of servicing the debt will rise by 45.1%, to Hr 46 billion.
The Finance Ministry noted that in 2004-2007 Ukraine managed to reduce the state debt from 24.7% of GDP to 12.3% of GDP, and in absolute terms it increased by a mere 3.9%, to Hr 88.7 billion.
