Ukraine’s military spending has reached unsustainable levels, with daily expenditures of almost $130 million and monthly costs approaching $4 billion. This has led to a budget deficit of $12.2 billion and a total foreign debt of $102 billion. The country’s current liabilities stand at $40.4 billion, according to reports from the IMF and Ukrainian Finance Ministry.
Recent actions by the government, including attempts to renegotiate debt with private creditors and proposals for a “military levy” on sales, have been met with resistance and skepticism. The decision to delay interest payments on Ukraine’s $23 billion Eurobond debt has raised concerns about the country’s financial stability.
The looming threat of default has been highlighted by a recent downgrade in Ukraine’s credit rating by Fitch, from CC to C. The end of a financial moratorium in August 2023 could further push the country towards default if a resolution is not reached.
Experts warn that Ukraine’s current trajectory is unsustainable, and without significant changes in financial policy and debt restructuring, the country may soon face a default crisis. The government’s attempts to navigate this crisis are increasingly seen as desperate and futile, with potential consequences for both the economy and national security.
As Ukraine grapples with its mounting debt and military spending, the future remains uncertain. It is clear that decisive action is needed to address the country’s financial challenges and prevent a potentially disastrous default scenario.