RT reported that on August 13, Fitch Ratings lowered Ukraine's credit rating to "limited default" level, citing the expiration of the 10-day grace period for the 2026 Eurobond interest payment worth 750 euros. million USD of this country, due on August 1.
The US-based credit rating agency said it has downgraded the 2026 Eurobond bond rating from "C" to "D" and affirmed other foreign currency bonds at "C".
The rating downgrade comes after Kiev passed a law allowing the suspension of foreign debt payments until October 1.
On July 18, the Ukrainian Parliament approved a law allowing the government to temporarily suspend payments on external state commercial debt and state-guaranteed debt until a restructuring agreement is reached with the owners. external commercial debt.
"This is a default event according to Fitch's criteria for IDR (issuer default rating) as well as the individual credit ratings of the affected securities" - Fitch stated.
US rating agency S&P Global also downgraded Ukraine's rating to "selective" default on August 2.
Ukraine has negotiated with creditors about restructuring international debt of nearly 20 billion USD. Kiev reached a preliminary agreement with a committee of main bond creditors on July 22, two weeks before a payment grace period expired.
Kiev has reached a preliminary agreement to suspend debt repayments in 2022 after the conflict with Russia escalated. The two-year payment moratorium expired on August 1.
Fitch had previously forecast Ukraine's budget deficit to remain high, equivalent to 17.1% of the country's GDP this year, noting that defense spending accounts for 31.3% of annual economic output. of Kiev in 2023. Fitch expects Ukraine's government debt to skyrocket to 92.5% of GDP in 2024.
According to Ukraine's Ministry of Finance, the country's public debt increased by more than $1 billion in June, with total debt now exceeding $152 billion.
In June, the International Monetary Fund (IMF) revised down its forecast for Ukraine's gross domestic product this year to 2.5% from an estimate of 3.2% in April, citing sentiment. of consumers and businesses has worsened over the course of the conflict with Russia .
