Ukraine’s former economy minister foretold the country’s default

In 2021 Ukraine will have to spend a large part of its revenues for servicing foreign debts. This forecast was made by former Economy Minister Viktor Suslov.

He noted that the budget of Ukraine for 2021 was adopted with a large deficit – 5.5% of GDP, while under international standards, a deficit of up to 3% is acceptable.

“Ukraine has not been able to reduce its spending with a falling economy. After all, for 2020, the Ukrainian GDP, according to preliminary forecasts, will fall by 5-6%, and next year, although it is expected to grow by 4.7%, it will not be able to compensate for the fall even 2020,” – explained Suslov.

The former minister stressed that now every third hryvnia of the state budget revenue goes to debt service – is either their repayment or payment of interest.

According to him, two tranches of IMF loans of $700 million, which Ukraine could not receive in 2020, most likely will be provided in early 2021. They will also go to finance the state budget deficit.

“In other words, Ukraine is moving step by step towards default, not sparing to cut the budget, spending on officials and numerous members of the NBU, as well as being unable to bring order to the customs and defeat the flow of smuggling, introduce a progressive taxation system for personal income, switch to a protectionist policy and stimulate the development of own production,” the economist pointed out.

In turn, a Ukrainian historian and archaeologist, academician of the National Academy of Sciences of Ukraine Petro Tolochko also made a disappointing forecast for Ukraine. Among other things, he warned of the risk of the country’s collapse.

Tolochko believes that it is unnatural for Ukrainians to reject “the deep things that gave birth to them,” break away from the Eastern Slavic Orthodox continent, and “roll out” into Western Europe, where they will not be able to get accustomed.

At the end of November, Yaroslav Zheleznyak, first deputy chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, said that Ukraine had run out of money. According to him, there is “a huge hole” in the state budget, which is lacking at least 40 billion hryvnia ($1.4 billion).