Leading think tanks call on Ukrainian authorities to prevent default

Leading think tanks have called on the Ukrainian authorities to take a number of steps in anticipation of an impending global crisis over the coronavirus pandemic, first of all, to prevent default.

According to a joint letter inked by economists at the Institute for Economic Research and Policy Consulting, the Ukrainian Institute for the Future, the Center for Economic Strategy, the Eidos Center, CASE Ukraine and EasyBusiness, handed to UNIAN, Ukraine's default would mean a rollback of the country's economy by five years.

"The margin of safety allows servicing and paying off debts, while support of the International Monetary Fund, the European Union, and other international institutions gives access to cheap financing, even when traditional financial markets are closed. Not to take advantage of this is to lose another decade of the country's development," the letter says.

Read alsoPandemic to change global economy – NBU deputy chief

Economists recalled that this year Ukraine is set to pay off US$7 billion to domestic investors and almost the same amount to external ones, and since financial markets are now simply closed to developing economies due to the largest turbulence since 2008, the program with the IMF must be continued.

Economists also called for keeping the budget deficit within the planned framework and creating a fund to "extinguish fire," including the negative consequences of dropping global trade and quarantine across the country, unforeseen health care costs, unemployment assistance and sick leave pay, as well as rescuing companies and banks.

In addition, economists recommend that Ukraine develop a plan to support the economy, introduce credit vacations and special credit lines for small businesses, establish control over the provision of loans to affiliated parties and the possible withdrawal of funds from banks, take measures to minimize panic in the financial markets, and pursue a sound exchange rate policy.

As UNIAN reported earlier, the number of deaths from the novel coronavirus originating from China's Wuhan rose to 6,513. As of March 16, there were 169,387 cases in total confirmed globally.

In Ukraine today there have been three lab-confirmed cases of coronavirus infection, while one of those patients died.

The panic on world markets caused by the rapid spread of the virus triggered a fall in the currencies of developing countries and stock market quotes.

Ukrainian Prime Minister Denys Shmyhal said Ukraine today has a stronger position than at the beginning of the 2008 global financial crisis.