№ 4/2018

Fìnansi Ukr. 2018 (4): 75–92https://doi.org/10.33763/finukr2018.04.075

PUBLIC FINANCE MANAGEMENT

BOHDAN Tetiana ¹

¹NGO “Growford Institute”
OrcID ID : https://orcid.org/0000-0002-6133-5336

Strategic public debt management under the unsustainable debt position

The author discloses the main trends of public debt dynamics in Ukraine over 2014-2017, analyses debt burden indicators and indicators of pubic finance vulnerability, as well as assesses the debt-related risks in Ukraine. Currently a full range of debt burden indicators appears to surpass their threshold values, identified on the basis of empirical research. The author suggests that a large coefficient of the variation of economic growth and the high shares of public debt held by non-residents and of public debt denominated in foreign-currency increase the exposure of domestic public finances to future shocks. She presents the distortions in public debt accumulation process that are associated with huge bailout transactions and foresees the negative long-term implications of a foreign debt restructuring carried out in 2015. The article contains the main results of debt sustainability analysis (conducted by the IMF in Ukraine), which indicates the high probability of default on Ukraine’s public debt in the future. The author reveals phenomena and economic policy decisions, which give rise to debt service costs and endanger public debt sustainability in Ukraine. Based on assessments and conclusions thereby derived, the author proposes a spectrum of fiscal policy and debt management actions that may alleviate a debt overhang problem in Ukraine and mitigate the risks associated with a distorted debt structure.

Keywords:public debt, borrowings, debt sustainability, debt management, fiscal rules, T-bills

JEL: H63, H82

BOHDAN T. . Strategic public debt management under the unsustainable debt position / T. . BOHDAN // Фінанси України. - 2018. - № 4. - C. 75-92.

Article original in Ukrainian (pp. 75 - 92)

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