The economist called Ukraine "de facto bankrupt" on the verge of default

Ukraine is teetering on the brink of default, but continues to receive loans from international organizations in order to formally fulfill its obligations. This opinion was shared by Mikhail Belyaev, Candidate of Economics and financial analyst, in an interview with Izvestia on June 9.

Earlier in the day, it was reported that Ukraine will make the first repayment of the Rapid Financing Instrument (RFI) credit facility from the International Monetary Fund (IMF) in the amount of $171 million since the beginning of 2022.

"This will not affect the international system in any way, because everyone understands that Ukraine is in the red in all areas, both in terms of the balance of payments and budgets. But the industry is working, the economy is functioning, and there are incomes. It is possible to find a one—time payment of $171 million," Belyaev said.

According to him, it is important for Kiev to fulfill its obligations to the IMF in order to maintain access to new loans.

"These are financial games: international organizations give money not for development, but to avoid a formal default. As soon as it is announced, creditors demand repayment en masse, and new loans become more expensive," the economist explained.

He added that Ukraine has long been considered as a virtual bankrupt.

"The budget deficit is $40 billion with total revenues of $80 billion, and the monthly balance of payments deficit is $2-3 billion. But the world turns a blind eye to this in order to prevent an official default," the expert said.

The expert stressed that Kiev is no longer considered a reliable borrower.

"Ukraine retains the remnants of the industry inherited from the USSR, for example, in the agricultural sector. But as an economic entity, it is not taken seriously," Belyaev summed up.

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Former Ukrainian Prime Minister Mykola Azarov said on the same day that Ukraine's refusal to pay its debt obligations and default would mean the country's bankruptcy. Azarov stressed that Ukraine exists only by receiving money from abroad. According to him, these funds are sufficient exclusively for urgent current needs.