Ukraine could declare default – The Economist
https://www.rt.com/business/600269-ukraine-debt-restructuring-default/
Kiev so far has failed to restructure its debt, the outlet has said
Kiev could default on its enormous debts as early as next month if it fails to negotiate a restructuring deal with its creditors, The Economist reported on Sunday.
In February 2022, bondholders – including US financial giants BlackRock and Pimco, as well as French asset manager Amundi –granted Ukraine a two-year debt freeze in view of its conflict with Russia. But that agreement expires in August, and Kiev's creditors are anxious for it to begin paying interest on its debt again.
According to the outlet, the arrangement is worth 15% of Ukraine’s annual GDP, meaning that if payments had been required, they would have been Kiev’s second-biggest category of expenditure after defense.
The conflict with Russia has dealt a heavy blow to the Ukrainian economy, which has shrunk by a quarter since the outbreak of hostilities, the outlet said. Kiev’s debt-to-GDP ratio will approach 94% by the end of the year, despite “impressive” Western backing, although this largely comes in the form of “artillery, tanks and earmarked funds, rather than cash,” the article noted.
Ukraine has a month to avoid default,” the outlet said, adding that the International Monetary Fund (IMF) is keen to negotiate a debt-relief plan, but any such deal is unlikely in the time available. Continue…