11:07 03.04.2014

Hryvnia devaluation results in increase of state debt by UAH 129 bln, says finance ministry

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Hryvnia devaluation results in increase of state debt by UAH 129 bln, says finance ministry

The hryvnia devaluation has resulted in the increase in the total amount of Ukraine's state debt by UAH 129 billion, Ukrainian Finance Minister Oleksandr Shlapak has said.

"Only this year we'll expand our debt by UAH 129 billion due to the exchange rate [weakening]," he said at a briefing on Wednesday, April 2.

He said that the servicing of state debt in 2014 will amount to near 10% of the national budget.

Finance Minister expressed hope that the exchange rate has reached the balanced indictor and the weakening of the national currency will stop.

The Finance Ministry expects that average annual hryvnia exchange rate in 2014 will be UAH 10.50/$1, while earlier the exchange rate of UAH 10-10.10/$1 was projected.

Shlapak said that the ratio of state debt to GDP this year will continue worsening and will reach the critical level – 60% of GDP.

"Today we have 42.9% of GDP – the dependency of the state on debt liabilities. Moreover, in 2014, we'll have the larger figure due to the exchange rate – UAH 804 billion [of total debt] or almost 53% of GDP," he said.

Shlapak said that the amount of the state debt accelerated due to populism of authorities over the past year: social standards were increased groundlessly and expenses were covered thanks to loans raised.

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