A significant proportion of the volume of global debt make up public debt. According to IMF estimates, the ratio of public debt to GDP in all countries of the world at the end of 2017 amounted to 82.4% of GDP, an increase over the past 5 years by 2.6 p. p. of GDP. The theoretical value for the ratio of external debt (gross debt: government + corporate) to GDP is 50%, the annual export of 275%, the repayment and servicing of debt to annual exports — 30%, external debt to annual exports — 20%.
States whose economies depend on external markets, are prone to serious risks and in periods of crisis phenomena in the global economy especially. In Ukraine the economic situation is sensitive to external challenges, because export and import is about 50% of GDP. The ratio of government debt in Ukraine is close to 80% of GDP.
Fig. Dynamics of indicators of the debt burden of Ukraine and their comparison with the limit values
But there are optimistic forecasts. As noted in the report of the Fiscal monitor international monetary Fund predicts decline in the level of total public and publicly guaranteed debt of Ukraine to 53% of GDP by the end of 2023.
According to IMF estimates, in 2018 the national debt will account for 70.5 percent of GDP in 2019 the following year was 68.8% of GDP in 2020 — 64,4% of GDP, in 2021 is 60.4% of GDP in 2022 — of 56.4%. In addition, the Fund predicts growth of deficit of the consolidated budget of Ukraine in the next two years.
According to IMF estimates, the budget deficit this year will reach 2.5% of GDP in 2019 and 2.6% of GDP, and then is expected to decline to 2.3% of GDP in 2020 to 2.2% of GDP in 2021 to 2.2% of GDP in 2022 and to 2.1% of GDP in 2023.
Revenues to the consolidated budget in 2018, the IMF estimates at 40.5% of GDP at a cost of 43% of GDP.
Forecast for 2019 for growth and budget revenues at 40.7% of GDP and at the same time costs to 43.3% of GDP, in 2020 — reduction to 40.2% of GDP and 42.5% of GDP, respectively, in 2021 — 8 to 39% of GDP and 42.1% of GDP, respectively, in 2022 — to 39.6% of GDP and 41.7% of GDP, respectively, and then in 2023 it is expected a slight increase in revenues to 39.8% of GDP, expenditures — to 41.8% of GDP.
Recall, approved in early December, 2017 the public debt management Strategy for the 2017-2019 required a reduction of direct public debt by the end of 2018 to 62% of GDP by the end of 2019 — 58% of GDP.
Ukraine’s state debt in 2017 increased by 11.1% to 1833,7 billion, or $ 65.3 billion, including external — to $ 38.5 billion, but relative to GDP it has declined from 69.2% to 61 5%, and taking into account the guaranteed government debt of 80.9% of GDP to 71,8% of GDP.
As reported, the Finance Ministry predicts growth of the limit amount of the guaranteed debt until the end of 2018 to of 747.6 billion UAH 579,4 billion envisaged in the budget for 2017.
Limit the size of the national debt, expected by the end of 2018 will exceed 1,999 trillion UAH UAH, while by the end of 2017 the estimated size of the national debt should not exceed 1,824 trillion UAH.
According to estimates of the Ministry of Finance, the national debt by the end of 2018 should not exceed 2,756 trillion UAH.
The ratio of total public (direct) and guaranteed debt to GDP for 2017 decreased to 71,8% from 80,9%, including direct debt decreased to 61.5% from 69.2% of GDP, guaranteed — to 10.3% from 11.7% of GDP.
On the level of external borrowing affect the Government and indirectly by the NBU. It should be noted that monitoring the level of foreign exchange reserves of the NBU, with the aim to maintain the country’s solvency while minimizing directions tranches of the IMF to stabilize the national currency is the problem which the NBU provides at this stage.
Regarding the Government’s competence in the context of the welfare of ordinary citizens and reduce debt, it is appropriate to consider the experience of European countries on the settlement policy of state budget expenditures to optimize their size. In this sense, special attention deserves the tax policy of the leading European countries, which contributes to the cheapening of credit resources and increase the profitability of business entities. We offer you to borrow effective elements of fiscal policy that will provide an opportunity to strengthen debt security of Ukraine.
As previously reported, the international monetary Fund lowered its estimates of GDP growth of Ukraine in 2019.