International experts believe that Ukraine, burdened by debt and lack of reform, may default in the near future, The Economist has reported.
According to the report, the Ukrainian government must pay external creditors $9 billion by the end of next year, plus an additional $5 billion in 2016 and $8 billion in 2017. At the same time, the country’s foreign-exchange reserves are drying up fast, having fallen from $37 billion in 2011 to $16 billion now.
According to the report, the good news is that Ukraine still has time to pull off an orderly restructuring. According to experts, with no oil to pump or other treasures to sell, it is hard to see how Ukraine’s shrinking economy can service its current debts, let alone the new ones the IMF is providing. The longer it delays, the greater the pain will be when its credit finally does run out.
Way out, according to experts, are urgent talks with creditors on the delay of the old and the new loan.
Earlier reports said that Ukraine was likely to default on its debts next year when it breaches the conditions of a controversial $3 billion bond held by Russia. Prime Minister Arseniy Yatseniuk, in turn, said that it was impossible Ukraine would declare default.
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