№ 1/2016

Fìnansi Ukr. 2016 (1): 39–56https://doi.org/10.33763/finukr2016.01.039

PUBLIC FINANCE MANAGEMENT

LONDAR Serhij ¹, PZVMOYQRFG naPKYMzuBtJ CNMfhvclkeFozR², VERESHCHAKA Ivan ³

¹Institute of Educational Analytics
OrcID ID : https://orcid.org/0000-0003-1838-288X
²KAXGWfqlTR, Research ID : http://www.researcherid.com/rid/
OrcID ID : https://orcid.org/
³SESE “The Academy of Financial Management”

The impact of restructuring of the external debt to private creditors at the debt sustainability in Ukraine

The possibility of improving the debt sustainability of public finance in Ukraine after 2015 in consequence of restructuring of the foreign debt owned by private lenders has been investigated in the article. As a result of long-term negotiations between the Government of Ukraine and foreign creditors there were reached the agreements, which provide reduction of sovereign and guaranteed debt by 20% or approximately by 3.6 billion US dollars, which greatly improves the balance of payments of Ukraine. The calculations of changes of debt burden of public finance have been carried out taking into account the conditions of restructuring, in particular increase of value of the restructured debt instruments by 0.5 percentage points, postponement of repayment of the public debt that cannot be written off from the period of 2015-2023 to 2019-2027. As is shown, the implementation of these transactions allows to make an assumption on a gradual reduction of the debt burden. Thus, by the current scenario, the government debt to GDP ratio may reach 69.0 % in 2016, 66.6 % — in 2017, 62.4 % — in 2018 and 49.2 % — in 2024. At the same time, providing the debt operations by the end of 2015 the debt to GDP ratio could be reduced by 66.3%. Within the framework of the developed model and given that the guaranteed government debt in total debt is approximately 23-25%, the overall debt burden on the Ukrainian economy in 2024 will not exceed the threshold of 60 % which is specified by the Budget Code of Ukraine. This Agreement with creditors also opens the way to achieve the important objectives of the restructuring, which were set in the program of cooperation between Ukraine and the IMF, in particular, to generate 15.3 billion US dollars for public finance sector during the program; to achieve public and publicly guaranteed debt to GDP ratio which does not exceed 71% by 2020; to decline the total government budget needs in funding in 2019-2025.

Keywords:public debt, debt sustainability, restructuring of external debt of Ukraine.

JEL: Н61, Н63.

Londar S. . The impact of restructuring of the external debt to private creditors at the debt sustainability in Ukraine / S. . Londar, n. C. pZVmOYqrfG, I. VERESHCHAKA // Фінанси України. - 2016. - № 1. - C. 39-56.

Article original in Ukrainian (pp. 39 - 56)

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