Debt of Ukraine: dynamics, creditors, repayment of loans

The public debt is a complex of the country's debt obligations to legal entities, individuals, other states, world organizations that are engaged in issuing loans and providing financial assistance. The public debt of Ukraine consists of several components:

• Credits of the central authority;
• Loans from regional and local authorities;
• Loans of joint groups with government investments.

In the latter case, the country must pay an amount commensurate with its percentage in the corporation's capital.

Forms of promissory notes

Outstanding state loans in form are divided into two types:

1. External loans of the country. This includes all borrowed funds that were borrowed from foreign states or international monetary organizations. These loans are included in the gross external debt of Ukraine.
2. Domestic credits of the country. This form of debt obligations includes money that was borrowed from owners of securities, shares or other creditors.

In general, the debt of Ukraine was formed due to large financial loans, contracts and agreements for the issuance of loan funds and loans. This also includes old loans, for which the state requested a postponement. Here we are talking about such concepts as the prolongation and restructuring of Ukraine's debt . Restructuring is an indulgence for the debtor, which is applied on an exceptional basis. Such a force majeure circumstance may be a difficult financial position of the borrower, in relation to the country - a default.

Dynamics of 2016

Since 2012, Ukraine's debt has increased by 26 billion dollars. For the current year, the state has agreed with the International Monetary Fund for several more tranches.

The current financial policy of the state provides not so much the repayment of old debts, but the possibility of taking new ones. And the goal is as large as possible loans. In other words, in 2016 the government of Ukraine collected loans totaling $ 10 billion, and repaid debts by only one and a half billion.

Former Prime Minister of Ukraine Arseniy Yatsenyuk said that during his work the state learned to take "the right" loans and reduce the number of debts. Such a conclusion was made as a result of the signing of the restructuring agreement. Most of the creditors went to this deal and partly wrote off debts to Ukraine. This led to the fact that the total amount of loans decreased from 73 to 66 billion dollars. If you divide the total volume of loans for the entire population, then for every resident of the country there are approximately two and a half thousand dollars.

But even with certain positive moments, Ukraine's debts are still growing. So, since 2014 due to devaluation of the national currency, the public debt has grown by about a trillion hryvnia.

"Credit of Yanukovych"

One of the loans, which was not affected by restructuring, is Ukraine's debt to Russia. It remained the same and is 3 billion dollars. And this is only a fifth of the amount requested by Viktor Yanukovych in the distant 2013. Initially, the agreed amount was $ 15 billion.

Having received a refusal from the Russian Federation to request a write-off of part of the debt, the country's government announced its suspension of its actions to repay the loan in connection with extraordinary circumstances. That is, the state officially announced its financial insolvency.

Since early 2016, the Russian Federation has announced its intention to sue. But even though the creditor has taken more radical measures to return money, the Cabinet says that the agreement will be achieved outside the trial. Now there is a dialogue on this issue at various levels, but Ukraine's debt to Russia remains unsettled.

Borrowers and creditors

Part of the public debt consists of bonds that were purchased by Oschadbank, Ukravtodor, Yuzhnoye, Ukrainian Railways. In general, the amount of listed Eurobonds is 16 billion dollars.

The country's creditors are mainly international financial organizations, such as the World Bank, the International Monetary Fund, the EU, the European Bank. Two years ago, the Ukrainian government agreed on a four-year program, the essence of which is that the IMF will send credit tranches in return for a certain reform of the economy.

Repayment of loans

Economists unanimously claim that a large number of loans are difficult to maintain. In the current situation, the state can not exist without borrowed funds.

The actions to regulate credit policy include the development of the economy, attraction of foreign investments.

The critical level of debt is 60% of GDP. And this line was long ago passed by the state. All the government's actions this year will be aimed at making Ukraine's debt become a percentage less than the critical indicator.