According to the Ministry of Finance, at the end of September the total amount of state and guaranteed state debt of Ukraine increased to $155 billion.
Points of attention
- Ukraine's total public debt has increased to $155 billion, with external debt accounting for 72% of the total. Despite the growth, the debt has fallen in price and matured, reducing its weighted average cost by 21.8%.
- More than half of Ukraine's debt comprises concessional loans, making the debt portfolio longer term and cheaper to service. The average maturity of public debt is over 11 years.
- Ukraine has increased budget spending for military needs by 500 billion hryvnia in response to Russia's ongoing aggression. The sources of additional funding include reducing debt costs, domestic debt bonds placement, and tax revenue increases.
- Head of State Vladimir Zelensky signed the law to increase military spending, following a vote in the Ukrainian parliament. The decision reflects the country's efforts to bolster defense capabilities amid the criminal war unleashed by Russia.
- The situation with Ukraine's public debt and increased military spending underscores the country's strategic financial decisions to address economic challenges while responding to external security threats.
What is known about the improvement in the situation with the growth of public debt in Ukraine
It is noted that the amount of external debt is $112.1 billion, or 72% of the total public debt.
During the third quarter, the total volume of government and guaranteed government debt increased by $3.5 billion (UAH 241 billion).
At the same time, the department noted that Ukraine’s public debt has fallen in price and become more long-term.
From the beginning of 2024 to September 30, its weighted average cost decreased by 21.8% — from 6.24 to 4.88 percent. The average maturity of public debt is more than 11 years, representatives of the Ministry of Finance emphasize.
More than half of the debt (58%) consists of concessional loans from international financial institutions and foreign governments, making the debt portfolio longer term and cheaper to service.
What is known about the increase in spending in Ukraine against the backdrop of the criminal war unleashed by Russia
Head of State Vladimir Zelensky signed a law increasing budget spending for military needs by 500 billion hryvnia against the backdrop of the war of aggression that Russia continues against Ukraine.
The official decision of the Ukrainian leader became known by the status of the law on the Verkhovna Rada website.
As mentioned earlier, the Ukrainian parliament voted to increase the budget for military needs on September 18.
The head of the Council's Budget Committee, Roksolana Podlasa, recently explained what the sources of the additional UAH 500 billion for defense would be:
UAH 115.4 billion — reduction in costs for servicing and repaying public debt;
UAH 216 billion — additional placement of domestic government debt bonds (OVDP);
UAH 100 billion — exceeding the tax collection plan;
UAH 30 billion — tax revenues from tax increases;
UAH 12.7 billion will come from an increase in excise tax rates on tobacco and fuel.
