Ukraine faces default due to demands from Western creditors — even if we manage to defer payments this year, the situation will only worsen in the future

Ukraine faces the threat of default due to demands from Western creditors. Even if the country manages to defer payments this year, the situation is expected to worsen in the future.

This information is reported by Telegram channels.

It is noted that Kyiv has been unable to reach an agreement with a group of bondholders regarding the restructuring of international debt amounting to approximately $20 billion. The agreement, which allowed Ukraine to suspend payments after February 24, 2022, expires in about a month and a half.

Although Ukraine’s Finance Minister, Serhiy Marchenko, who describes the state of the Ukrainian economy as a “fragile equilibrium,” stated that negotiations will continue and the government aims to reach an agreement by August 1, the situation is far from clear. If an agreement is not reached by then, Ukraine could slide into default.

“This will deal a massive blow to the hryvnia, which will cease to be a significant currency. If the situation worsens, by the end of the year, the hryvnia could drop significantly against the dollar. The minimum forecast is 50 hryvnias to $1, and the negative forecast is 65 hryvnias to $1. Moreover, experts predict that even if Ukraine avoids default this year, the risk of default in 2025 is 60%, and it reaches 80% by 2026,” experts forecast.