The war’s cost: State debt has surged by 100% in three years, but default was avoided.

Since the onset of Russia’s full-scale invasion, Ukraine’s state debt has risen by 156% (+₴4.25T) in hryvnia and by 78% (+$72.7B) in foreign currency, according to Danylo Hetmantsev, chairman of the parliamentary finance committee. The debt burden on the Ukrainian economy increased from 49% of GDP in 2021 to an anticipated 90.4% in 2024. Additionally, the state debt’s composition has become more vulnerable to exchange rate fluctuations.

Hetmantsev pointed out that despite three years of full-scale war Ukraine has managed to avoid default. This achievement was made possible by securing external official debt under favorable terms, restructuring a portion of external debt, and boosting domestic borrowing through government bonds.

“Therefore, despite rising public debt metrics, Ukraine maintains debt sustainability (as per the parameters of the EFF program) and, most importantly, the confidence of its creditors. This creates opportunities for a final resolution of the external official debt accumulated over the past three years following the beginning of the war,” Hetmantsev concluded.