Ukraine’s national debt reaches historic high — EU is largest creditor

Ukraine’s national debt reached a historic high by August 31, increasing by approximately €1.2 billion to around €189.6 billion.

This was reported by Ukraine’s Ministry of Finance.

Over the month, the debt grew by approximately €596.9 million, or 0.3%. In hryvnia terms, the total national debt reached 9.6 trillion hryvnias.

The structure of the national debt according to Ministry of Finance data is as follows:

— external government debt — 7.341 trillion hryvnias (76.45%), or approximately €144.9 billion;
— domestic government debt — 2.003 trillion hryvnias (20.86%), or approximately €39.6 billion;
— state-guaranteed debt — approximately €5.1 billion (2.68%).

At the same time, direct external debt rose from approximately €143.7 billion, while domestic debt decreased from approximately €39.6 billion.

The Ministry of Finance explained the moderate pace of debt change in August primarily by exchange rate fluctuations — the revaluation of liabilities against the backdrop of changes in accounting currency rates.

“The moderate pace of debt change in August is driven primarily by exchange rate fluctuations (the revaluation of liabilities against the backdrop of changes in accounting currency rates). The portfolio of domestic government bonds (OVDPs) has grown by 36.2 billion hryvnias this year,” the Ministry of Finance noted.

State-guaranteed debt, meanwhile, has been steadily declining: over the eight months of the current year it decreased from 276.68 to 257.81 billion hryvnias, or from approximately €5.7 billion to approximately €5.1 billion. Its share of total debt over this period fell from 3.06% to 2.68%.

The creditor structure is dominated by long-term concessional loans raised from international financial organizations and foreign governments — approximately 64.6% of the debt portfolio. The European Union remains Ukraine’s largest creditor, accounting for 3,762.0 billion hryvnias (72.51 billion euros, or approximately €74.3 billion), which represents 39.2% of total debt.

Against the backdrop of growing national debt, Ukraine is experiencing an acute budget deficit. The draft budget for next year is already in deficit. The IMF has calculated that Ukraine’s financing gap will reach approximately €47.5 billion by 2029.