The macroeconomic situation in Ukraine remains unstable, vulnerability of the fiscal system in the past years has grown, World Bank Country Director for Belarus, Moldova and Ukraine Satu Kahkonen has said.
She said that the vulnerability had increased in the past years, taking into account the fact that government’s expenses grew, as the government increased minimum salaries, pensions and salaries of civil servants.
She said that the World Bank was concerned with how Ukraine would finance the payment of external debt, the peak for which would be at the end of 2018 and early 2019.
Kahkonen said that if the cooperation program with the International Monetary Fund (IMF) was not extended, the country would not receive money from the World Bank that could be provided to maintain budget and conduct reforms.
The provision of the money from the European Union is planned to cover the deficit of the budget depends on the IMF, she said. Loan markets would also negatively react to this signal, Kahkonen said.
Earlier Ukrainian Finance Minister Oleksandr Danyliuk said that he did not see the preconditions for a default in 2019 or 2020: “There will be no default. We are doing everything to reduce the debt burden on our economy.”
In particular, he said, this was facilitated by an annual reduction in the budget deficit, as well as Ukraine’s entry into the eurobond market in September 2017. (Interfax-Ukraine/Business World Magazine)