It is a perceived wisdom that external financing has been one of
the main sources for supporting the Ukrainian economy at all times,
including in times of hardship, as we have now. At the same time,
all foreign funds, by and large, were coming to the state and
private sector, while municipal borrowers have been lagging behind.
According to the data of the Ministry of Finance of Ukraine, there
were seven loan agreements executed by Ukrainian city councils in
2013 with foreign lenders and only one in 2012. Based on the
publicly available information, the number of external local
borrowings in 2014 would hardly reach the level of 2013.
Given that urban development is quite important for overall
Ukrainian economic growth and its needs are not currently satisfied
in full, we believe that the government should give more attention
to the issue of local financing in order to create positive
dynamics in the regions.
