War pushing Ukraine toward debt default

Ukraine is burning through money fast. The invasion by Russia has been costly for the country. According to the International Monetary Fund, Ukraine’s GDP could shrink by 35% as a result of the war.

The country’s international grain exports have been severely hampered, with a recent deal to restart exports likely to move only some of its current stocks. The country shipped US$27.8 billion in agricultural products to other countries last year, or 41% of its total exports.

Ukrainian monthly grain exports have dropped significantly since Russia’s invasion. International Food Policy Research Institutute (IFPRI)

It is not surprising then that the country’s public finances are in distress. Ukraine’s ministry of finance has estimated its public sector deficit increased from US$2 billion in March 2022 to as much as US$7 billion by May.

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