PUBLIC DEBT OF UKRAINE AND PROBLEMS OF ITS SERVICE

Abstract

The sustainability of public debt is a fundamental determinant of a nation’s macroeconomic stability and financial sovereignty, especially during periods of extreme systemic shocks. This article presents a comprehensive analysis of the dynamics and structure of Ukraine’s public and state-guaranteed debt over the period from 2020 to 2025, with a particular emphasis on the impact of full-scale war and the resulting fiscal imbalances. The study explores several key dimensions of debt management, including the rapid growth of the debt-to-GDP ratio, the transformation of the debt portfolio's currency structure, and the increasing reliance on external concessional financing. Using statistical data from the Ministry of Finance of Ukraine and international financial institutions, the article identifies overarching trends in debt accumulation, highlights the risks associated with peak repayment periods, and analyzes the cost of servicing domestic versus foreign liabilities. Special attention is given to the structural challenges that have emerged as a result of the unprecedented financing needs of the defense sector and the contraction of the national economy. The analysis underscores the critical role of international financial assistance and the strategic importance of debt restructuring agreements reached with international creditors to alleviate immediate liquidity pressures. The article pinpoints the vulnerabilities caused by inflationary pressures, exchange rate fluctuations, and the limited capacity of the domestic bond market. The article offers a synthesized perspective on Ukraine’s debt endurance under wartime conditions. It outlines the prospects for long-term fiscal sustainability in the post-war period, emphasizing the need for a balanced debt management strategy, the integration of innovative financial instruments, and the alignment of borrowing policies with European integration goals. Furthermore, the findings suggest that the transition from emergency borrowing to a structured debt-reduction path will be essential for maintaining investor confidence and ensuring the continuity of essential state functions. The study concludes that effective debt servicing is not merely a matter of fiscal accounting but a foundation for the successful post-war reconstruction and sustainable economic growth of Ukraine.