Fitch affirms Ukraine’s rating at ’limited default’
The international rating agency Fitch Ratings has affirmed Ukraine's long-term foreign currency rating at RD - limited default.
This is stated on the website of the rating agency, Censor.NET reports with reference to Ekonomichna Pravda.
Debt restructuring
As noted, Ukraine continues the process of restructuring its external debt.
"The suspension of debt service is expected to last until the debt restructuring process is completed. Ukrenergo failed to pay deferred interest on November 9, 2024. Ukraine's foreign currency IDRs will remain at 'RD' until Fitch assesses the completion of exchanges and the normalization of relations with a significant majority of external commercial creditors," Fitch said.
Ukraine's local currency ratings have been affirmed at 'CCC+'. A significant portion of the national debt is held by the NBU and Ukrainian banks.
"In our view, this ownership structure would limit the benefits to Ukraine from any restructuring of its debt as it would create potential fiscal costs. Such a restructuring could also pose risks to financial sector stability and hinder the development of the domestic debt market," Fitch said in a statement.
Expectations
Fitch expects the general government deficit to remain high in 2025, at 19.1% and 19.2%, respectively.
The agency predicts that despite the recent tax hikes, high defense spending and a decline in foreign grants will keep the deficit high.
