The recent downgrading of Ukraine's credit rating to the level of "limited default" caused concern both within the country and among international investors. However, economic expert Volodymyr Zolotoryov believes that, despite the negative reputational consequences, a significant deterioration of the economic situation should not be expected.
The downgrading of Ukraine's credit rating, which the Fitch Ratings agency recently downgraded from "C" to "RD" (limited default), attracted the attention of the world community. Volodymyr Zolotoryov believes that the first reaction to this news will be negative, because such a rating usually means that the country is in a difficult financial situation, which makes it risky for lending.
"The first reaction to this will be negative, because everyone will understand that this is a country that cannot be given money. But everyone knows that there is a war here, so I don't think that it will have any serious effect on the real money that goes here," Zolotorev explains.
The expert also emphasized that there are almost no cases in the world where states have defaulted in the same way as private enterprises. "In the case of an enterprise, everything is simple: there is a debt, it cannot be paid. After that, there is a bankruptcy procedure, assets are seized. Something is returned to those who gave loans. In the case of the state, this cannot be done. At least, there were no such precedents," Zolotoryov noted.
This means that although the downgrade reflects Ukraine's difficult financial situation, the mechanisms for managing such a situation in the case of the state are fundamentally different from those used for private companies.
According to Zolotoryov, the world economy is already heading towards a major default, which affects not only Ukraine, but also such economically developed countries as the USA and Western Europe. "Ukraine's default against this background will be inconspicuous," the expert adds, stressing that the threat of default is becoming a global challenge.
The downgrade came after the Ukrainian government agreed with international creditors to restructure its debt in the amount of more than $20 billion. This was a necessary step to maintain financial stability during the war. However, even in the presence of such agreements, rating agencies continue to assess Ukraine's creditworthiness at a very low level.
