S&P agency announces Ukraine's default on GDP-linked bond issue

This is stated in a Reuters report, seen by Ukrinform.

"The Ukraine government said on Friday it would not make the payment, based on 2023 economic performance, but would continue to seek a restructuring of the instrument," the report notes.

The agency explains that Ukraine created this special instrument – ​​fixed-income bonds linked to economic growth – to facilitate debt restructuring in 2015. However, these bonds have a complex structure and were therefore not included in the broader restructuring last year.

According to S&P, the ability, as well as medium-term incentives, of the Ukrainian government to fulfill financial obligations in the national currency are somewhat higher than those related to foreign currency debt.

 "A default on these LC obligations would amplify banking sector distress, increasing the likelihood that the government would have to provide the banks with financial support and limiting the benefits of debt relief," the agency added.

As Ukrinform reported earlier, in April, the IMF published the World Economic Outlook (WEO) report, lowering expectations for economic growth in Ukraine. In particular, the Fund predicts that in 2025, it will stand at only 2.0%.