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Ukraine’s state debt risks exceeding ₴5 trillion and will amount to 90% of GDP.

Over the year, Ukraine's gross foreign debt increased by almost 25%. How does this threaten the financial system?

As of October 31, Ukraine’s state and state-guaranteed debt amounted to ₴4.96T. According to November’s results, the national debt will probably exceed the ₴5T mark, having increased by ₴2.3T (+46.1% or $43B in foreign currency) since the beginning of the war. This will amount to approximately 90% of GDP, said the chairman of the parliamentary finance committee, Danylo Hetmantsev.

He specified that in October, the domestic debt increased by 2.1%, or ₴32.2B, while the external debt grew by 1.2%, or ₴39.6B. The increase in the national debt was due to the involvement of another tranche of macro-financial assistance from the EU and high interest rates on military bonds. The Ukraine budget deficit is mainly covered by OVDP funds and assistance from partners.

Previously, the IMF believed that Ukraine’s total public debt would increase to 88.1% of GDP this year, next year – to 98.6% of GDP, and 100.7% of GDP in 2025.

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