Fixed Income

June 30, 2020

Ukraine’s sovereign Eurobonds finally corrected last week after 6 weeks of large gains amid the COVID recovery on global markets. Investors found a reason to sell in the IMF’s downgrade of the forecast for Ukraine’s economy next year. The IMF said it expects Ukrainian GDP to drop by 8.2% this year with a weak recovery of just 1.1% in 2021. The IMF sees low savings of Ukrainian households and limited government fiscal support as major negative factors for the economy going forward. Meanwhile, the latest data on Ukraine’s public debt indicates it has not changed much since the start of the year, staying at USD 82bn and implying a debt to GDP ratio of approximately 60