As of June 30, 2024, the state and state-guaranteed debt of Ukraine reached a record level of 6.16 trillion hryvnias, which is equivalent to 152.2 billion US dollars. In particular, the foreign debt amounted to 4.45 trillion hryvnias (109.9 billion dollars), and the domestic debt - 1.71 trillion hryvnias (42.2 billion dollars).
This level of indebtedness is a serious challenge for the country's economy, but it is worth noting that the volume of debt relative to Ukraine's GDP does not yet exceed 100%. By comparison, at the end of World War II, the ratio of Great Britain's GDP to its national debt was as high as 250%, demonstrating that countries can rebuild their economies even after such extreme levels of indebtedness.
During the second quarter of 2024, the public debt of Ukraine increased by 243.7 billion hryvnias, and in dollar terms - by 1.1 billion US dollars. Despite this growth, the weighted average value of the state and state-guaranteed debt of Ukraine decreased by 10.3% since the beginning of the year - from 6.24% to 5.6%. This indicates a certain stabilization of financial markets and a reduction in the risks associated with lending to the state.
The growth of the national debt during the war is a natural phenomenon, especially when the country acts as a victim of aggression. Ukraine is forced to attract additional funds to finance defense and social costs in war conditions, which leads to an increase in debt.
However, one of the possible options for easing the debt burden is lobbying to write off part of the foreign debt at the expense of Russia's frozen funds. This approach can become key in reducing the financial burden on the Ukrainian economy.
Regarding the domestic debt, the government is considering raising taxes and other budget revenues. If the relevant draft law is supported by the Verkhovna Rada, by the end of the year it is planned to issue an additional 220 billion hryvnias in the form of domestic state loan bonds (OVDP). This will raise additional funds to finance government needs, but may also increase the debt burden.
