A twofold increase in efforts to mobilize revenue for the state budget from domestic sources and the completion of the restructuring of Ukraine's commercial debt within specified obligations are key conditions for successfully reducing Ukraine's national debt, stated Era Dabla-Norris, Deputy Director of the IMF's Fiscal Affairs Department, during a press briefing in Washington on Wednesday.
"(...) the authorities (of Ukraine – IF-U) need to continue restoring debt sustainability. In this regard, there are two important aspects: to complete the restructuring of external commercial debt in line with program commitments, to double efforts to mobilize domestic revenues, and to accelerate the implementation of the National Revenue Strategy," she said.
Norris emphasized that this Strategy aims not only for more effective revenue mobilization but also for a fundamental change in the tax system, reducing tax evasion, and enhancing fairness and equality in this matter, among other goals.
"The IMF has long been convincing countries that this is not about raising rates. It's about broadening the (tax – IF-U) base and creating the most equitable and fair tax systems," noted the Deputy Director.
In the Global Financial Stability Report released on Wednesday, the IMF expects global debt to exceed $100 trillion this year, which corresponds to 93% of the world's GDP, and to continue growing, reaching 100% of GDP by 2030. According to Fund representatives, factors such as weak economic growth, tightening financial conditions, and geopolitical and political uncertainty may exacerbate debt risks.
"This applies to both Ukraine and many other countries. In the case of Ukraine, in particular, the prospects, as you know, remain extremely uncertain," Norris pointed out.
According to the document, the IMF forecasts the level of public and publicly guaranteed debt in Ukraine to be 95.6% of GDP in 2024, 106.6% of GDP in 2025, 107.6% of GDP in 2026, and 102.6% of GDP in 2027. The Fund expects a decrease to 98.5% of GDP and 94% of GDP in 2028 and 2029, respectively.