The main risk for macroeconomic stability in the near future is the failure of the structural reforms prescribed by the IMF, said the national Bank of Ukraine. In this case, the country will remain without financing with a huge foreign debt
The building of the National Bank of Ukraine in Kiev
(Photo: Miroslav Rotar / RIA Novosti)
The national Bank of Ukraine said that the main risk for the implementation of the compiled macroeconomic forecast is the failure of the cooperation program with the International monetary Fund (IMF) and a deviation from the program of structural reforms agreed with the IMF. This is stated in the statement published on the regulator’s website.
According to the forecast, the NBU, in 2019, the Ukrainian economy will grow by 2.5% and in 2020, its growth will be 2.9%. “The key assumption of this scenario remains further progress in implementing structural reforms under the program of cooperation with the IMF”, — the document says.
The regulator expects that the necessary reforms will be implemented, and in 2018 year, Ukraine will receive about $2 billion from IMF, and loans from the EU and the world Bank. “This will give the opportunity to increase international reserves to $20.7 billion at the end of the year. However, in 2019 and 2020 because of peak of payments on external public debt balance of payments deficit, and international reserves are at around $20 billion,” — noted in the Bank.
“Further delay in the implementation of the program of cooperation with the IMF reduces the probability of receiving funding under this program, and all the more narrows the window of opportunity in raising debt resources on the international capital markets necessary for the implementation of peak payments on public debt in 2018-2020,” the statement reads.
Earlier in June, the head of the national Bank of Ukraine Yakov Smoliy at the meeting with top managers of the largest banks gave a slightly different assessment of the situation. He said that until 2020, Ukraine should be able to pay its debts in the future, the country needs to successfully implement structural reforms. “The volume of international reserves of Ukraine enough to go through the period of peak payments on public debt until the end of 2020, and without external funding, but the future prospects of economic growth will directly depend on progress in structural reforms”, — said resin.
About the threat of default of Ukraine to the failure of cooperation with the IMF also warned the key business associations of the country, reports UNIAN. They urged the authorities and the international monetary Fund to unlock a $1.9 billion loan tranche until July 20, as further delaying the process may lead to the problem of national debt servicing and disruption of macroeconomic stability.
The President of the European Business Association (EBA), Executive Director of Dragon Capital Tomas Fiala said that the cooperation with the IMF necessary to establish in the near future. “It is important that cooperation with the IMF was continued as quickly as possible, so that the mission came this summer, not in September, because then the anti-corruption court, gas prices and the budget deficit will be have the budget for the following year. In this case, the process may be delayed until 2019. It’s an election year when foreign aid should not count. While the country faces default,” said Fiala.
In may, Prime Minister of Ukraine Volodymyr Groysman said that the country will have to repay over the next four years the debt of $27 billion.