Ukraine is increasingly sinking into debt dependence. In the first six months of 2025 alone, the government spent UAH 510.9 billion on repayment and servicing of state and state-guaranteed debt. This is almost a quarter more than in the same period last year.
The total volume of state liabilities increased by 10% and reached UAH 7.7 trillion. This dynamics indicates a classic debt spiral: Ukraine is forced to borrow new funds to cover the budget deficit and fulfill existing obligations.
The debt structure is particularly worrisome. If at the beginning of the year the share of foreign currency liabilities was 74.7%, now it is 76.9%. This means a critical dependence on the hryvnia exchange rate. Any weakening of the hryvnia will automatically increase the burden on the budget.
It is estimated that the state will spend about UAH 981 billion on settlements with creditors in 2025, an amount comparable to 11% of GDP. This level of spending sharply limits the government's ability to finance social programs, support the economy, and rebuild the country after the war.
Economists emphasize that the larger the debt and its foreign exchange share, the more vulnerable the economy is to external shocks. In the event of slow economic growth and stagnant budget revenues, the country risks finding itself in a situation where debt servicing will crowd out all other expenditures. This means reduced investment in development and even greater dependence on new loans.
