Fixed Income

April 06, 2021

Ukrainian sovereign and corporate Eurobonds finished mostly lower last week. Although the country’s fiscal system has performed better than expected this year, there is still some concern regarding sources for coverage of the expected national budget gap of 5.5% GDP for 2021. Ukraine’s actual budget deficit was reported at UAH 218bn (USD 8.1bn at the average exchange rate) for full-year 2020, which in relative terms implies 5.2% of GDP for the year. The Finance Ministry said that state revenues exceeded the planned figure by 4.7% in 1Q21, and that the state budget was executed with a deficit of UAH 24.4bn (USD 880mn) in 1Q21, compared to a UAH 66.8bn deficit that had been planned.