Ukraine will ask international bondholders to agree to a two-year delay in payments on its debt so it can focus its dwindling financial resources on fending off Russia, a government resolution published on Wednesday showed.
Facing an estimated 35% to 45% drop in GDP this year following the invasion of Moscow in February, lawmakers have instructed the country’s finance ministry to negotiate a delay on its debt of about $20 billion until Aug.
The delay, which many creditors say is likely to be accepted and quickly garnered support from major Western powers, would come just in time to defer about $1.2 billion in debt payments due in early September.
The government’s resolution posted on its website said that “all bond interest payment dates” would be deferred under the plan.
In a bid to avoid what would be classified as a default, Kiev plans to offer creditors, which include governments and many of the world’s biggest investment funds, additional interest payments once the freeze ends.
Ukraine has estimated a fiscal deficit of $5 billion — or 2.5% of pre-war GDP — a month, which economists calculate brings its fiscal deficit to 25% of GDP, compared with just 3.5% before the conflict.
Moreover, researchers at the Kiev School of Economics estimate that more than $100 billion will already be needed to rebuild Ukraine’s bombed infrastructure, while the head of the European Union’s powerful financial arm, the European Investment Bank, has warned that it could come. to trillions of dollars.
Source: CNN Brasil

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