Payments on GDP warrants of $40 mln in 2021 with moderate GDP growth potentially could reach $22 bln by 2040 – Finance Minister
The decision to partially buy back GDP warrants issued during the restructuring of Ukraine's external debt in 2015 is aimed at reducing payments from the state budget, which next year should amount to $40 million, and for the entire circulation period of these securities may exceed $22 billion by 2040, Finance Minister Serhiy Marchenko has said.
"Potential payments on government derivatives until 2040 with a moderate GDP growth may amount to more than $22 billion. In this regard, a government decision was made ... under the heading" secret," which determined the terms of the transaction," the minister said at the parliamentary committee on finance, taxation and customs policy.
Marchenko clarified that the government's forecast for GDP growth for 2021 is 4.6%, and with such an increase in terms of GDP warrants, $600 million would have to be paid in 2023.
The minister recalled that the Verkhovna Rada, with changes to the 2020 state budget, gave the Ministry of Finance the right to carry out transactions with state derivatives this spring.
He also clarified that after the publication of information on the transaction, the quotations of the GDP warrants increased by 8 percentage points at once.
GDP warrants were issued as part of the government debt restructuring in 2015 to replace eurobonds for a nominal amount of $3.2 billion and are not part of the country's public debt. Payments under GDP warrants will be carried out annually in cash in U.S. dollars, depending on the dynamics of real GDP growth in Ukraine in 2019-2038, but in two calendar years, that is, between 2021 and 2040.