Ukraine's Economic Downfall: From Potential European Leader to Indebted Loser
© Sputnik / Alexandr Demyanchuk
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On August 30, ratings agency, S&P Global, affirmed Ukraine's foreign currency credit rating at "selective" default, after the country announced plans to restructure over $20 billion of debt.
Gaining independence in 1991, Ukraine had the potential of becoming a leading European economy, due to its industries, agriculture, vibrant population and diverse trade ties inherited from the Soviet Union. However, it has now ensnared itself in a debt trap.
The International Monetary Fund (IMF) will decide next week whether to provide Ukraine with another $1.1 billion from a $15.6 billion aid program.
After tearing apart preliminary peace accords with Russia in April 2022, the Zelensky regime went on a debt spree. Ukraine's government-guaranteed debt has grown to $155.36 billion (over 88% of GDP), with an increase of $3.2 billion over the past three months alone.
Ukraine's debt under Volodymyr Zelensky has catapulted by about $74 billion – roughly the total debt accumulated by the first five Ukrainian presidents, according to estimates.
Ukraine's gross external debt surged to $167.8 billion in March 2024.
The ratio of Ukraine's gross external debt to GDP reached 90.4% in 2023, according to the Ukrainian analytical website, Minfin. In the wake of the US-backed Ukrainian 2014 coup d'etat, this ratio skyrocketed to 95.8% (2014), 131% (2015), 121.7% (2016), and 103.9% (2017).
According to the World Bank, Ukraine's GDP per capita converted to 2021 international dollars using purchasing power parity (PPP) rates, amounted to $22,887 in 1990 and ranked 52d in the world, whereas in 2023, that indicator was just $16,231. Note that Ukraine's population also shrank from 52 million in 1991 to around 38 million in 2023.
Under the first Ukrainian President Leonid Kravchuk (1991-1994), Ukraine borrowed just around $400 million, or 1.1% of GDP. In 1991, Ukraine's economy was considered stronger than those of Poland and Belarus.
