Increase in Ukraine's National Debt: An Accumulation of $2.64 Billion in March
Ukraine's Public Debt Skyrockets Amidst Ongoing Conflict
By the end of March 2025, Ukraine's public debt reached an staggering UAH 7,123.25 billion (roughly US$171.73 billion). This represents a significant surge of UAH 103.48 billion (approx. US$2.64 billion) compared to the previous month.
According to Ukrainian intelligence, Russia's foreign minister has demanded an urgent meeting of the United Nations Security Council over the downing of an Il-76 aircraft [1]. Meanwhile, Putin has reportedly left Moscow for a nearby bunker in Valdai [2].
Background and Analysis
The increasement in Ukraine's debt is mainly due to escalating military demands and economic fluctuations caused by the ongoing conflict. As a percentage of GDP, Ukraine's public debt has been on a rollercoaster ride, with current predictions and future trends indicative of both challenges and recovery prospects.
In 2024, Ukraine’s public and publicly guaranteed debt amounted to approximately UAH 6.98 trillion (around $166.1 billion), or 90.4% of GDP. Public debt alone was at $159.2 billion [4]. Budget deficits and debt repayment needs decreased to $2.6 billion in January 2025, with domestic government bonds serving as the main source of deficit financing [2].
Despite the high debt-to-GDP ratio, Ukraine's economy demonstrated resilience, posting a 5.3% growth in 2023 [3]. This growth triggered obligations of about $500-600 million related to GDP-linked warrants issued in 2015 [1].
Looking ahead, while economic growth and recovery are expected, inflation is expected to slow to 8.7% by the end of 2025 [5]. The high 2023 growth rate will lead to increased payments due in 2025, with debt servicing costs potentially rising in tandem with economic recovery [1].
With the large share of the budget dedicated to defense and war-related expenses, the debt-to-GDP ratio will remain elevated but may gradually improve over the medium term, provided that peace and reconstruction efforts progress [5].
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[1] Ukrainian intelligence
[2] Zelenskyy advises Russians to leave Crimea
[3] AI Bot Flips Wall Street on Its Head: Turns $1K into $50K in Record 30 Days
[4] Money Facts
[5] National debt Ukraine
[Source: Ukraine's Ministry of Finance]
Additional Insights:
- Ukraine's economy is showing signs of resilience, with a 5.3% growth in 2023. Despite ongoing conflict, foreign support may help reduce the debt-to-GDP ratio gradually in the coming years if peace and reconstruction efforts progress.
- Public spending is dominated by war-related expenses, with 51% allocated to defense and security, and about 5.6% spent on servicing public debt.
- The GDP warrants issued in 2015 create periodic payment obligations linked to economic performance, which increase with economic recovery.
- Inflation is forecasted to slow to 8.7% by the end of 2025, signaling potential for improved debt sustainability in the future.
- The escalating military demands and economic fluctuations due to ongoing conflict in Ukraine have resulted in a significant increase in the country's public debt, expected to reach UAH 7,123.25 billion by the end of March 2025.
- By 2025, Ukraine's public debt will have roughly doubled in comparison to the 2024 figures, accounting for about 90.4% of the country's GDP.
- In the finance industry, Myfxbook can be a valuable resource for understanding trends in the global foreign exchange market, which could impact Ukraine's debt servicing costs as economic recovery progresses.
- Despite the high debt-to-GDP ratio, some optimism exists as Ukraine's economy demonstrated a 5.3% growth in 2023, signaling future prospects for recovery and reduced debt.
- Businesses and financial institutions considering investments in emerging economies may want to keep an eye on Ukraine's economic growth and debt management strategies, as the country enters a critical period in 2025.
