WASHINGTON (Reuters) - The International Monetary Fund is able to lend to Ukraine because the country’s debt is sustainable, the head of the IMF’s European department, Reza Moghadam, said on Friday.
“Debt in Ukraine is sustainable,” Reza Moghadam said in a news conference during the IMF and World Bank spring 2014 meetings.
He noted that Ukraine’s external debt, which has suffered as a result of the country’s political crisis and tensions with Russia, was only around 30 percent of its GDP.
Ukraine’s total debt would be around 50 percent of GDP this year and next, he said.
“It is difficult to see that it would go on an unsustainable path. We can go ahead and lend,” Moghadam said.
The IMF has pledged to cover Ukraine’s financing needs of $27 billion over the next two years.
The exact size of the IMF program will depend on how much other international lenders, like the European Union, would contribute to the government in Kiev, Moghadam said.
Reporting by Jan Strupczewski; Editing by Paul Simao