Ukraine will ask international bondholders to accept a two-year delay in debt payments so it can focus its dwindling financial resources on fending off Russia, according to a government resolution released Wednesday.
Facing an estimated 35% to 45% decline in GDP this year following the occupation of Moscow in February, lawmakers have instructed the country’s finance ministry to defer its roughly $20 billion debt until August 15.
The delay, which many creditors said would likely be accepted and quickly garnered support from the major Western powers, came just in time to delay debt payments of about $1.2 billion due in early September.
The government’s decision, posted on its website, said “all bond interest payment dates” would be delayed under the plan.
To avoid a situation that could be classified as a default, Kyiv plans to offer additional interest payments to governments and creditors, which includes many of the world’s largest mutual funds, once the freeze ends.
Economists have estimated Ukraine’s fiscal deficit of $5 billion per month – or 2.5% of pre-war GDP.
Also, researchers at the Kyiv School of Economics estimate that more than $100 billion will already be needed to rebuild Ukraine’s bombed-out infrastructure, while the European Investment Bank, the European Union’s strong financial arm, warned that this could come.
source: Noticias
[author_name]
