IMF: Ukraine's debt is sustainable; Fund can lend to Kiev

The IMF has pledged to cover Ukraine's financing needs of $27 billion over the next two years.

IMF: Ukraine's debt is sustainable; Fund can lend to Kiev

World Bulletin/News Desk

The International Monetary Fund is able to lend to Ukraine because the country's debt is sustainable, the head of the IMF's European department, Reza Moghadam, said on Friday.

"Debt in Ukraine is sustainable," Reza Moghadam said in a news conference during the IMF and World Bank spring 2014 meetings.

He noted that Ukraine's external debt, which has suffered as a result of the country's political crisis and tensions with Russia, was only around 30 percent of its GDP.

Ukraine's total debt would be around 50 percent of GDP this year and next, he said.

"It is difficult to see that it would go on an unsustainable path. We can go ahead and lend," Moghadam said.

The IMF has pledged to cover Ukraine's financing needs of $27 billion over the next two years.

The exact size of the IMF programme will depend on how much other international lenders, like the European Union, would contribute to the government in Kiev, Moghadam said.

Meanwhile, the world's top economies are monitoring the economic situation in Ukraine "for any risks to economic and financial stability," according to a draft of the communique by the Group 20 finance ministers and central bankers.

The International Monetary Fund and the World Bank remain best placed to help countries deal with their "economic challenges through policy advice and catalytic financing," the draft, which was obtained by Reuters on Friday, says in the same section.

In another section that appeared to address the spillover effects of the monetary policies of advanced economies, the draft of the G20 communique pledges to provide "clear and timely communication" of its actions, with an eye on the effects on the global economy as policies are "recalibrated."

Last Mod: 28 Nisan 2014, 16:06
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