If a restructuring agreement is not reached, Ukraine will have two options: agree to extend the moratorium on debt payments or declare default.
The Ukrainian authorities have a month to negotiate debt restructuring. If an agreement is not reached, the country faces a default. This was stated in an article by The Economist magazine published on Sunday, June 30.
function news4698184() {
$.get(‘//’ + window.location.host + ‘/ajax/module.aspx?spm_id=444&id=4698184&lang=2&IsAjax=true’, function (data) { $(‘#nk4698184’).html(data); });
}
news4698184();
The publication recalls that over the past two years, Ukraine’s creditors have agreed to suspend debt payments. However, on August 1, the moratorium on payments to private foreign bond holders ends.
“The war is still wreaking havoc on Ukraine’s economy, with the country’s GDP down by a quarter compared to the day before Vladimir Putin’s all-out invasion, while Russia’s recent attack on energy infrastructure has worsened growth forecasts,” the article said.
It is indicated that if a restructuring agreement is not reached, Ukraine will have two options: agree to extend the moratorium on debt payments or declare default.
“Strong armies must be supported by a strong economy,” warned Ukraine’s Finance Minister Sergei Marchenko.
It is known that Ukraine has offered creditors an agreement that will reduce 60% of the current value of debts, but creditors believe that 22% is a more reasonable option. The IMF is keen for Ukraine to negotiate debt relief, but a deal appears unlikely at the time available.
“If Ukraine defaults, it will show an alarming lack of faith among private investors in Western commitments. In the long term, this could spell disaster for the country’s recovery,” the magazine warned.
Earlier in June, Ukraine failed to reach an agreement with a group of bondholders to restructure commercial debt worth about $20 billion. The government hopes to reach an agreement with creditors by August 1.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.