Litwin
Platinum Member
looks like fight for the czar´s throne just began
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Even the U.S. controlled IMF is unwilling to throw more money into that black hole:The Ukrainian government has struggled to raise money on bond markets during the war and is paying investors more than it is collecting, according to a Central Bank statement that points to the country’s deepening dependence on foreign aid.
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The economy has been projected to shrink about 40 percent this year, drying up tax revenue and indefinitely delaying previously planned spending that would have spurred growth.
The Central Bank statement, published on Monday, pointed to a less visible side of Ukraine’s financing shortfalls caused by the war: an inability to raise money on the market. Since Russia invaded on Feb. 24, Ukraine has not been able to roll over debt accumulated before the war. The country paid investors about $2.2 billion more than it collected in bond sales in that time, the Central Bank said.
All of that has left Ukrainian public finance, which has been wobbly at the best of times in the post-independence period, deeply reliant on assistance from the United States, the European Union, European countries that donate individually and other donors.
In contrast international trade with Russia has been booming this year and its financial numbers, recently mentioned by its president Putin, look better than those in the 'west':The budget passed by Ukraine’s Parliament for next year includes a deficit of about $36 billion. About half of the planned expenditures are for the army, the police and other military outlays. The deficit this year has run even higher, at about $5 billion a month.
The International Monetary Fund, which bailed out Ukraine through a long run of post-independence financial crises, has not continued large-scale lending during the war.
“They are worried about debt sustainability,” said Tymofiy Mylovanov, a former economy minister who is a professor at the Kyiv School of Economics. “If the I.M.F. is worried about debt sustainability and ability to finance, imagine what private investors are thinking.”
When the war ends the Ukraine will have an incredible amount of debt that it will not be able to pay for in generations. It will have no more land to sell off to foreigners and no industry left that will be of any value.First, the predicted economic collapse did not happen. True, we have posted a decline, and I will repeat the figures. There have been promises – or predictions or hopes maybe – that Russia’s economy will contract. Some said its GDP would drop by 20 percent or more, by 20–25 percent. True, there is a decline in GDP, but not 20–25 percent; it is in fact 2.5 percent. That is the first thing.
Second. Inflation, as I said, will be a little more than 12 percent this year – it is one of the most important indicators, too. This, I think, is much better than in many other countries, including the G20 countries. Inflation is not good of course, but it being smaller than in other countries is good.
Next year – we have mentioned this, too – we will strive for the 4–5 percent target, based on the economy's performance in the first quarter – at least, we hope so. And this is a very good trend, unlike in some other G20 countries, where inflation is on the rise.
Unemployment is at a historic low of 3.8 percent. We are running a budget deficit, this is true, but it is only 2 percent this year, next year too, then it is projected at one percent, and less than one percent in 2025: we are expecting about 0.8 percent. I would like to point out that other countries – both large developing economies and the so-called developed market economies – are running a much greater deficit. In the United States, I think, it is 5.7 percent, and in China, it is over 7 percent. All major economies are running deficits above 5 percent. We are not.
This is a good foundation for moving confidently into 2023.