Former Ukraine Economic Minister Viktor Suslov recently issued a warning that the country is gradually moving toward default.
|Many officials and experts believe that Ukraine could default by 2021.|
In an interview with Glavred, Mr Suslov said that Ukraine’s budget for 2021 has been passed with a large deficit of 5.5%, while acceptable levels in the world and in Ukraine itself are considered up. up to 3%.
“The scale of this deficit shows that Ukraine is not able to cut spending in the context of the economy is going down,” said former Minister of Economy.
“Such a situation is dangerous because of the accumulation of domestic and foreign public debt,” Suslov explained. At the same time, at the request of Western creditors, Ukraine was forced to give up beneficial cooperation.
According to the former minister, the situation could be changed by cutting the salaries of officials and increasing the progressive tax rate that could save the country, but the authorities will not do it.
In addition, Mr. Suslov believes that Ukraine can be saved from default by refusing to “stick” to foreign loans and funds. From the problem of debt obligations and the direction of the country to industrial modernization, increasing the competitiveness of Ukrainian enterprises, … After that, Kiev can pay all the debt obligations due to more budget revenue and increase Foreign exchange income for coffers.
Earlier this year, Mr. Suslov warned of the risk of default for Ukraine, despite two loans from the International Monetary Fund (IMF) worth $ 700 million, which the country could not accept in the year. 2020 and likely to be received in the first half of 2021. According to Mr. Suslov, this money will be used to finance the state budget deficit.
On 12/1, Mr. Oleg Soskin, Director of the Kiev Institute of Social Transformation, Head of the Department of International Economic Relations of the National Institute of Management Ukraine said that by 2020, Ukraine has prepared all conditions for a Economic and financial disasters are likely this year. Mr. Soskin said that by 2021, the country will have to repay more than 25 billion USD of debt to creditors, accounting for nearly 70% of budget revenue.
It is reported that by 2021, Ukraine must pay nearly $ 1.7 billion in debt to the International Monetary Fund. At the same time, by 2022, Ukraine must pay the fund about $ 2.4 billion.
In fact, this information was also warned by incumbent officials in Ukraine.
Mikhail Saakashvili, head of Ukraine’s National Reform Council, warned that the country is facing a serious challenge: the economy is severely affected by the COVID-19 pandemic. .
According to Saakashvili, Ukraine may soon find it difficult to pay the most basic of social welfare by 2021.
“Ukraine’s economy is heading to a major catastrophe. A very strong budget crisis is lurking, and Ukraine will have problems with salaries and pensions starting next year” – Saakashvili explain.
The former Georgian President noted that the money from the International Monetary Fund (IMF) will help Ukraine in the short term, but Kiev will soon struggle with the most basic financial obligations, such as salaries and social security payments.
Such a crisis has never happened in Ukraine since the 1990s. Ukraine signed a $ 5 billion deal with the IMF on June 9, which is expected to be shorter than 18 months. To date, Kiev has received $ 2.1 billion of these.
“Something needs to be done otherwise, this country will go down the drain” – Mr. Saakashvili said strongly.
Russian RT newspaper said Saakashvili’s assessment has received approval from Russian Senator Alexey Pushkov. In a post on Twitter, the Russian senator said that the consequences of Ukraine’s economy come from the fact that they set up barriers in economic relations with Russia and follow the trend of European integration.
“Saakashvili has made a sober assessment of the situation in Ukraine, saying that their economy is heading to an inevitable disaster” – Senator wrote on Twitter.
Senator Pushkov also noted that the reasons for Ukraine’s economic crisis come from the “gap between trade and the economy”.
He listed the reasons: “Relationship with Russia; the failure of the European integration policy; lack of foreign investment capital. Ukraine is living on grants while the authorities are inactive. “
However, at a press conference in December 2020, Ukraine’s Finance Minister Serhiy Marchenko said that there was no basis for the country to default. Mr Marchenko urged not to use the word “default”, adding that Kiev has a strategy that the state should refuse loans.