The Cabinet was told how to reduce the national debt to 49% of GDP

В Кабмине рассказали, как снизят госдолг к 49% ВВП

To reduce the debt burden on the budget, the government plans to achieve a uniform repayment schedule of debt with the continuation of the terms of the basic payments.

The Cabinet of Ministers of Ukraine plans before the end of 2020 to reduce its public debt to 49% of GDP. To that end, intended to achieve an equal repayment schedule of debt with the continuation of the timing of the main benefits, says monthly Information Bulletin of the government.

“Goal: by the end of 2020 to reduce the size of public debt to 49% of GDP. To reduce the debt burden on the budget, the government plans to achieve an even maturity profile with the continuation of the terms of the basic payments. This will avoid peak payments, overly pressing in on the budget and distractions is a significant resource which can be aimed at further structural reforms”, – stated in the text of the document.

It is stated that to carry out this task, the Ministry of Finance will gradually increase in the structure of public debt to attract long-term concessional financing, providing for the further deepening of cooperation with international financial institutions.

“Such cooperation helps to attract cheap loans, including for infrastructure projects and reinforce economic growth”, – stated in the Bulletin.

As expected by the government, reducing the debt will also be boosted by the planned increase in borrowings in local currency (including from international investors), which will reduce the risk of growth of debt in foreign currency fluctuations.

“To this end, the Ministry of Finance will start to develop the domestic debt market. In particular, conditions will be created for foreign investors to invest in government securities denominated in national currency”, – stated in the message.

The Cabinet also stressed that the expansion of the investor base and facilitate the access for them on the domestic debt market should reduce the cost of loans, which will also reduce debts and avoid the risk of increasing the national debt in exchange rate fluctuations.

“Cheap credit will accelerate economic growth. Therefore, the government plans to continue cooperation with international financial institutions and foreign governments to attract concessional lending. To simplify this work and the improvement of Ukraine’s rating as a borrower. Also, in the future it will help reduce the cost of loans,” – noted in the log.

We will remind, the state budget of Ukraine in January-July 2018 is made with a deficit of 13,356 billion.

It was also reported that Ukraine and the EU will soon sign an agreement on the terms of the tranche of macro-financial assistance of one billion euros.

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