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Japan Warns Ukraine: The Limit is Near

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Editorial Teamhttps://www.xtrempoint.com
Where News Meets Insights, We Keep you Ahead!
Moscow, March 24 – Japanese analyst Yosuke Tsuchida wrote in an article on the JB Press website that the growth of Ukraine’s domestic debt against the background of a record increase in external lending is fraught with serious threats, while the domestic borrowing limit will soon be reached.
As the author notes, the growth of military spending has put tremendous pressure on Ukraine’s financial system, given the rapid growth of the budget deficit, Kiev’s debt due in 2022 amounted to $128 billion.
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Kiev has become dependent on the support of the world community, and while the West is allocating money, Ukraine is “still afloat,” while requests for new tranches are already becoming a kind of mantra, since the country does not have its own money, the analyst said.
At the same time, the domestic debt owed to the Ukrainian government in 2022 amounted to $39.6 billion, and most of this growing domestic debt is in so-called “war bonds” issued on the primary market by the Central Bank of Ukraine. “But you can’t let them out indefinitely,” Tsuchida warned. “Kiev will soon reach its limits.”
According to him, the bulk of government bonds in Ukraine is absorbed by the Central Bank itself, that is, “the state finances itself with bonds,” which is fraught with serious threats. Thus, this strategy has serious negative side effects – rapid and “raging” inflation growth, which in 2023, according to international experts, will reach 35% in Ukraine on an annual basis.
At the same time, due to the prolongation of hostilities in Europe and the United States, a difficult situation has developed: “fatigue from supporting” Ukraine is becoming more and more noticeable, he continues. “There is no evidence of an early end to the conflict yet, and it is only natural that the West is increasingly cautious about increasing the volume of aid to Ukraine,” Tsotida added.
Earlier, the International Monetary Fund (IMF) reached an agreement with Ukraine on a loan program worth $15.6 billion for four years.
Read the full text of the article on the InoSMI website >>
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