Government controls situation in economy, no grounds to speak about default - Bleyzer Foundation
2013-07-23 12:27:20
Ukrainian government controls the situation in the economy and there are no serious grounds to speak about a pre-default state.
Bleyzer Foundation Executive Director in Ukraine Oleh Ustenko expressed this opinion, commenting on including Ukraine into a list of 10 countries with the pre-default state, the rating agency Standard & Poor's has said about this the previous day.
“There are no serious grounds to speak about the pre-default or default situation, I would not (speak about this)... There are difficulties, fighting populism is extremely important, both government and oppositional... But the situation is under control. There are reserves (covering the balance of payments' deficit) for three months,” the expert stressed.
He also noted that this decision of the rating agency is not consistent with the real situation, which is being formed on the world markets. “Several months ago there has been a real panic, insurance of risks was raised for work with developing countries,” the expert reminded.
Oleh Ustenko also added that similar decisions concerned not only Ukraine, but also, for instance, Hungary. “This repeatedly proves that the world economy is in the turbulent state and any statement causes panic moods, in particular, if this concerns the countries with developing economies, to which Ukraine is referred,” the expert explained. At the same time, Oleh Ustenko stressed that when the matter concerns Ukraine, the situation improved for the state over recent several days and currently it is favorable for entering capital borrowing markets.
“According to data, Friday (July 19) lowering of credit-default swaps was noted. This means that if earlier Ukraine could borrow under 10% annual, now the state could try to borrow under 9% annual,” the expert explained.
The economist also added that he confirmed the favorable situation of today's (Monday) market dynamics for the country as regards Eurobonds. Cost of loans became less, this means that the Ukrainian government could borrow under lesser percent,” Oleh Ustenko explained.
He also assumed that the Ukrainian government could try to use this window of possibilities. “I think that it is not worth speaking about global loans, but there is the deficit budget and it should be sounded,” the expert added.
He also added that in estimation of the situation, Standard & Poor's includes ability of the state to realize its payment obligations. “Ukraine repaid more than 50 percent of all external obligations, which it had to repay this year,” the expert reminded.
In this connection, he stressed once again that there are no grounds to speak about the pre-default situation.