REUTERS
Ukraine will face the suspension of production, the weakening of the hryvnia, spiraling inflation if it fails to repay its debts.
Ukrainian Prime Minister Volodymyr Groysman says Ukraine should continue cooperation with the International Monetary Fund (IMF) to avoid default.
"Ukraine's failure to repay debts will translate into a threat of default. And this means the suspension of production, the weakening of the hryvnia, inflation. We need to safeguard people against such negative developments, so we need new borrowings to repay the old ones. And then, it is necessary to build up the economy," he wrote on Twitter on August 22.
At the same time, the prime minister did not say whether any decision had been taken to meet IMF conditions for a new disbursement, namely an increase in the price of natural gas for households or state budget tweaks.
Read alsoUkraine may get another IMF tranche this fall – central bank official
As UNIAN reported earlier, to continue cooperation with the IMF, Ukraine should review the deficit of the national budget in line with the benchmarks of the Extended Fund Facility (EFF) and ensure the transition to a market-oriented algorithm to set gas prices for households.
In March 2015, the IMF approved a four-year EFF loan program for Ukraine with $17.5 billion in disbursements. Under the program, Ukraine has received only four disbursements from the Fund to the tune of $8.7 billion due to the slow implementation of the agreed reforms. The program is expiring in March 2019. However, the National Bank of Ukraine and the Finance Ministry expect to receive $1.9 billion from the IMF in 2018.