Finance minister states Ukraine’s debt doubles in three years
(MENAFN) Ukraine’s public debt has nearly doubled over the past three years and is now close to 100% of the country’s GDP, Finance Minister Sergey Marchenko stated on Thursday. Despite this sharp increase, he said the government still plans to continue borrowing from international partners.
Before the conflict with Russia escalated in 2022, Ukraine's debt stood at a relatively manageable 55% of GDP. Today, it has surged to approximately 7.1 trillion hryvnias (around $171 billion). Marchenko acknowledged that Ukraine would likely be unable to repay its foreign debts within the next 30 years but downplayed the risk, citing the favorable terms of most of these loans.
“These debts won’t be repaid for decades,” Marchenko said, adding that Kyiv will continue to require external financing whether the country is at war or peace. He also suggested that Western countries may eventually need to cover Ukraine’s debt obligations using their own budgets.
Currently, Ukraine is using interest from frozen Russian central bank assets held in Western countries to help pay down its debt. For example, Japan recently issued a $3 billion loan to Ukraine that will be repaid using proceeds from those frozen Russian funds. The EU has also contributed a €1 billion tranche backed by the same mechanism.
Moscow has condemned this approach, branding it as “theft” and warning of consequences.
Meanwhile, Ukraine’s financial strain continues to deepen. A deal with the U.S. has given Washington preferential access to Ukrainian mineral resources in exchange for aid, but without security guarantees. Russian Security Council Deputy Chair Dmitry Medvedev criticized the arrangement, saying Ukraine was being forced to trade away its natural wealth to pay for American assistance.
Kyiv is also facing a possible default on nearly $600 million in GDP-linked securities due this May. So far, negotiations with hedge funds to restructure that debt have failed.
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