The Accounting Chamber has adopted a Compliance Audit Report on “Public Debt Management.” This is the first such audit in a decade, and its findings demonstrate a large-scale transformation of Ukraine’s debt policy amid a full-scale war.
According to the Accounting Chamber, under the conditions of Russian aggression, state spending, primarily on defense, has increased sharply. At the same time, the occupation of some territories and the destruction of the economy have led to a decline in production, a reduction in exports and investments, which has led to a decline in GDP and a rapid increase in the budget deficit. To cover it, the government has been forced to significantly increase borrowing, primarily external.
As of the audit period, the volume of Ukraine's public debt had tripled to UAH 7.4 trillion. The share of external borrowings in the total debt increased from 47 to 75%, and their amount reached UAH 4.3 trillion. Thus, Ukraine's debt portfolio has become critically dependent on external creditors and is characterized by increased currency and refinancing risks.
During 2022 - the first half of 2025, the ratio of public debt to GDP ranged from 77.8% to 90.9%. This significantly exceeds the safe threshold of 60% of GDP set by the Budget Code of Ukraine (although these restrictions are suspended for the period of martial law). Auditors emphasize that this is an excessive debt burden on the state budget.
The budget deficit showed explosive growth: in 2022 it increased by 460% compared to 2021, in 2023 by another 46.1%, and in 2024 by another 1.7%.
According to the Accounting Chamber, for 2022 - the first half of 2025, the costs of servicing and repaying the state debt amounted to UAH 3.2 trillion. In fact, about 20% of all state budget expenditures during this period went to fulfill debt obligations.
Auditors warn: in such conditions, the state's ability to finance social programs, infrastructure development, and reconstruction is significantly limited, as a significant portion of resources is directed to debt.
A separate block of comments concerns the regulatory lack of regulation of public debt management. The Accounting Chamber states that:
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medium-term debt management strategies for 2023–2025 and 2025–2027 have not been approved;
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Draft budget declarations for 2023–2025 and 2024–2026 were not developed (due to the suspension of the relevant requirements of the Budget Code).
All of this, according to the auditors, significantly limited the possibilities of medium-term planning of debt indicators and forecasting debt servicing costs.
Another illustrative example is the creation of the Debt Agency. By Cabinet Resolution No. 127 of February 12, 2020, the government decided to establish it, and this agency was supposed to take over key functions in managing the state debt. However, despite five years since the adoption of this resolution, its actual start of work has not yet taken place - there is still no corresponding government decision.
The Accounting Chamber also drew attention to the fact that the current regulatory and legal acts do not contain clearly defined debt risk indicators. Such a system of indicators could help to timely assess risks to debt sustainability, but in practice it is absent.
The Ministry of Finance states in its explanations that risks are taken into account when planning debt indicators. However, the materials provided to the Accounting Chamber do not contain documentary evidence of such an assessment.
The audit results show that Ukraine is entering a period of post-war reconstruction with an already extremely high debt burden, significant dependence on external creditors, and the absence of a fully functioning institutional model of debt management.
The Accounting Chamber emphasizes: without transparent strategies, a real launch of the Debt Agency, and clear risk indicators, it will be extremely difficult to ensure debt sustainability in the long term and reduce debt service pressure on future budgets.
