Previously I have created few charts displaying Ukraine's GDP since collapse of Soviet Union, and compared Ukraine vs Poland by GDP. In both chart's we can see, that economy of Ukraine is tragically weak (weakened?).
Today I red articles about possible default of Ukraine.
...It will finally lead to Ukrainian default next year, as Russia will stop its crediting. And today Ukrainian balance of payments is supported to a large extent by Russian credits and Russian direct investments. If this crediting is stopped or crucially reduced, the default will be imminent and, the change of regime – inevitable. Other people will get into power and it will lead to serious social and political destabilization...
The government’s failure to resume borrowing from the International Monetary Fund may put Ukraine in default early next year when the country has to repay massive debt, former President Viktor Yushchenko...
Analysts at the Bloomberg agency say that Ukraine will be the next country after Greece to default in debt repayments because of the poor state of its economy. The analysts quote the IMF as doubting the ability of Kiev to repay the 12 billion dollar debt. But not all the experts agree with the conclusion of the analysts, seeing political undertones in it.
The first and most urgent crisis is that Ukraine is running out of money. Throughout the course of 2012, its foreign currency holdings went from $31 billion to less than $25 billion, and by June had slumped to roughly $21.7 billion. Even more alarmingly, Ukraine’s level of “import coverage” (the number of months’ worth of imports that it can afford with its current level of foreign reserves) decreased from an already low level of 3.5 months in January 2012 to less than 2 months by the end of May. While there is no perfect “rule” of import coverage, anything less than three months is usually seen as problematic, and Ukraine’s level has been relentlessly ticking down for the last two years.
Will International Monetary Fund save Ukraine?
"I think that one should not expect default. The situation is not so bad. Of course, it forces you to think and make decisions, but Ukraine has several safeguards that it can use. The most effective one is to resume cooperation with the IMF," CEO of Dragon Capital investment company Tomas Fiala told Interfax-Ukraine.
What do you think? Will Ukraine go default?