Western financial measures are leading Kiev into a sovereign debt crisis, with the burden expected to exceed Ukraine’s GDP by the end of the year, the Russian ambassador to the UN has warned.
“We will hear a lot today about the solidarity of the Western community with Ukraine, the readiness to support it ‘as long as it takes.’ However, it is necessary to understand that this support is taking Ukraine to the brink,” Vassily Nebenzia told the UN Security Council on Monday. “Its foreign debt surged to a record $132 billion, or 89% of GDP in 2022. It’s estimated that by the end of this year it will exceed 100%.”
The Russian envoy added that the “enormous funds allocated to Ukraine by the IMF, the EU, and the US are driving that country into a debt pit,” cautioning that “ordinary Ukrainians will have to repay the debts.”
Commenting on Kiev’s agreement with US financial company BlackRock to launch the Ukraine Development Fund, Nebenzia noted that the American firm will be in charge of managing the finances.
“What essentially is happening under the guise of attracting private investment for large-scale projects in key areas of the economy, is a transfer of state sovereignty to external corporate management of the world’s largest investment fund headquartered in New York,” the diplomat stated.
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Ukrainian President Vladimir Zelensky has pushed Western leaders to provide more and more cash to sustain the economy and military. He previously told the World Bank and the International Monetary Fund that the country would need $55 billion in 2023 to cover the estimated budget deficit and rebuild critical infrastructure amid the conflict with Russia.
Ukraine has already deferred payments until 2024 on more than $20 billion of debt held by international investors. It is set for foreign debt restructuring next year, with G7 creditors claiming they would only extend their grace period for Ukrainian debt if private creditors agree. The nation’s budgetary shortfall is estimated to surpass $43 billion in 2023 alone.
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