Ukraine’s total public debt in 2024 rose to a new all-time high: by $22.74 billion, or 14.3%, to $166.06 billion in dollar terms, and by UAH 1 trillion 461.3 billion, or 26.5%, to UAH 6 trillion 980.9 billion in hryvnia terms, according to the website of the Ministry of Finance.
According to the data, the direct public debt increased by 16.5% in dollars to $159.20 billion, or UAH 6 trillion 692.4 billion, and accounted for 95.9% of the total public and publicly guaranteed debt.
In 2024, Ukraine’s total external public debt increased by 18.1%, or by $18.38 billion, to $114.88 billion, while the total internal public debt increased by 16.7%, or by UAH 276.0 billion, to UAH 1 trillion 863.1 billion.
As a result, the share of total external public debt increased from 70.0% to 72.3% over the year.
According to the Ministry of Finance, the share of liabilities in euros at the end of 2024 increased to 33.01%, in US dollars to 26.81%, in SDRs to 11.39%, in Canadian dollars to 2.83%, in British pounds to 0.11%, while in hryvnia it decreased to 25.33% and in yen to 0.51%.
The agency also clarified that 65.01% of the state debt has a fixed interest rate, while 11.39% is tied to the IMF rate, 12.66% to SOFR, 3.80% to EURIBOR, 0.51% to TORF and 0.10% to SONIA.
The rate for another 2.08% of government debt is tied to the consumer price index, and 4.17% to the NBU discount rate. These are government bonds from the NBU’s portfolio. The newest of these were the securities linked to the key policy rate, which the NBU bought as part of the issue financing of the 2022 budget.
Finally, 0.27% of the state debt has a rate linked to the Ukrainian index of rates on retail deposits, which is used in portfolio guarantee programs.
The Ministry of Finance previously noted that Russia’s full-scale invasion of Ukraine in 2022 led to a sharp increase in the ratio of public debt to GDP – from 43.3% at the end of 2021 to 79.4% at the end of 2023.
As reported, Ukraine’s public and publicly guaranteed debt increased by $13.4 billion in 2022 and by $33.9 billion in 2023.
The IMF, as part of the sixth review of the EFF Extended Fund Facility program with Ukraine last December, improved its forecast for public debt growth due to higher GDP growth and lower deficits: to 92.2% of GDP by the end of 2024 and to 104.3% by the end of 2025, while in October it estimated it at 95.6% of GDP and 106.6% of GDP, respectively.
Earlier, the Experts Club think tank and Maxim Urakin released a video analysis on the state of debt in the world, see more details on the YouTube channel: https://youtu.be/gq7twYrWuqE
France’s public debt at the end of the second quarter of 2024 rose to 112 percent of GDP, up from 110.5 percent at the end of March.
This was reported by the National Institute for Statistics and Economic Research (Insee).
From April to June, the debt increased by €68.9 billion, reaching €3,228.4 billion.
You can learn more about public debt and the economy in the video on the YouTube channel of the Experts Club think tank: https://youtu.be/gq7twYrWuqE
Global public debt may exceed $100 trillion (93% of global GDP) in 2024, according to the Fiscal Monitor report published by the International Monetary Fund (IMF) on Tuesday.
It is expected to continue to grow in the medium term and may rise to 100% of GDP by 2030.
At the same time, under the most unfavorable scenario, global debt could be almost 20 percentage points higher than the baseline forecast and reach 115% of GDP in 2026.
“Debt stabilization (or reduction) is likely to require much more significant fiscal adjustments than currently planned. Now is the right time to restore fiscal buffers, and delaying them is costly,” the report says.
The IMF believes that public debt will continue to grow in countries such as the United States, the United Kingdom, Brazil, France, Italy, and South Africa.
“While debt is projected to stabilize or decline in about two-thirds of countries, it will remain well above levels projected before the pandemic,” the report says. Moreover, the countries that are not expected to stabilize account for more than half of the world’s debt and about two-thirds of global GDP.
Government spending to address the problems of the “green transition” in the energy sector, population aging and security issues is likely to increase fiscal pressure in the coming years, according to the Fund’s experts.
“It’s time for governments to get their act together,” said Era Dabla-Norris, IMF Deputy Director for Fiscal Affairs. – “All countries need a strategic turnaround to reduce debt risks.
For more information about public debt and possible country defaults, please watch the video on the YouTube channel of the Experts Club think tank: https://youtu.be/gq7twYrWuqE?si=0WcmU20F95oeVKZp
Prime Minister of Ukraine Denys Shmyhal has thanked foreign investors for their decision to defer payments on Ukraine’s external debt until 2024.
“Investors in Ukraine’s external debt gave their consent to defer payments until 2024 with a possible extension for another year. Thank you for the step of solidarity. We are also grateful to the G7 countries for supporting this position,” Shmyhal wrote on his Telegram channel on Wednesday.
He said that thanks to this decision, Ukraine will save almost $6 billion on payments over the next two years.
“These funds will help us maintain macro-financial stability, strengthen the stability of the Ukrainian economy and increase the power of our army,” the head of government said.
The prime minister added that the holders of securities of the state-owned Ukrenergo and Ukravtodor also accepted the postponement offer, thanks to which Ukraine could better prepare “for the most difficult heating season in history and more effectively restore infrastructure destroyed by Russian terrorists.”
Ukraine is accurately servicing its public debt, and the International Monetary Fund (IMF) expects that this situation will continue, but they call for supporting the country with grant financing.
“At the moment, Ukraine is servicing its debt in an orderly way. And we would expect that to continue,” IMF spokesman Gerry Rice said at a traditional briefing on Thursday.
Asked about the lack of recommendation to Ukraine to request freezing of payments or something like that, Rice noted that he had no other position than the one stated above.
“We’ve been supporting them with a program loan of $1.4 billion. We’ve supported them from the SDR, the SDR allocation. We’ve established the administered account for donors to support Ukraine. Canada, Germany, the Netherlands have all stepped in so far. We are expecting more in the coming days,” he said.
“What we see as the priority in terms of financing for Ukraine right now is grant financing. In in the short term that’s the best form of assistance that can be provided by the international community in light of the war situation and the nature of the shock. And that would allow the Ukrainian government to remain operational without incurring further debt,” he added.
The Ministry of Finance of Ukraine in March raised the forecast for payments on public debt in 2022 by UAH 4.93 billion compared to the March forecast – up to UAH 572.26 billion, according to the forecast for April on the agency’s website.
According to him, the largest amount of payments falls on April-June of this year – UAH 167 billion, while in August-September it is projected at the level of UAH 145.32 billion, in October-December – UAH 124.63 billion.
The Ministry of Finance estimates payments on domestic debt in 2022 at UAH 440.95 billion, and on external debt at UAH 131.32 billion.
According to the Ministry of Finance, on a monthly basis, the largest amount of payments fell on February – UAH 75.78 billion, and May – UAH 69.59 billion.
At the same time, the ministry increased the forecast of payments on public debt in 2023 by UAH 25.71 billion to UAH 400.91 billion.
In 2024, the ministry expects a payment in the amount of UAH 348.74 billion.
