Ukraine's public debt: management and servicing mechanism

Abstract

The article examines the views of scientists on the prerequisites and features of the formation of public debt, analyzes the causes and consequences of its emergence. It also substantiates the policy of debt management and servicing, which will contribute to ensuring financial stability and economic development of Ukraine. The approaches and recommendations outlined are aimed at reducing the debt burden, improving financial stability and creating conditions for sustainable economic growth.

The results of the study indicate that the military conflict and economic instability in Ukraine have significantly complicated the problem of public debt, which is rapidly increasing due to the need to finance vital expenses. The growth of the state budget deficit forces the government to actively attract both domestic and external borrowing, which leads to an increase in the overall debt pressure on the country. Currently, Ukraine manages to keep the debt burden at a manageable level - less than 80% of GDP. Thanks to the support of international partners and creditors during the war, the issue of debt payments is not critical. However, after the end of hostilities, public debt management will become one of the key challenges. It is predicted that in 2024–2027, external debt payments will amount to about 6% of 2022 GDP, and the main challenge will be the volume of future payments, rather than the overall level of debt in relation to the economy.

The conclusions indicate that the implementation of international experience in public debt management in Ukraine faces a number of obstacles, including: limited economic growth and the impact of martial law on debt sustainability; high external dependence and currency risks; political factors and the need to coordinate strategies with international partners; as well as the need to improve the legal framework for the effective implementation of new mechanisms.

Resolving these problems will allow Ukraine to manage public debt more effectively, reduce debt risks, and ensure stable financial development.

Prospects for further research include the development of the domestic bond market and attracting private investment as an alternative to external borrowing. In addition, an important direction will be the analysis of the impact of demographic changes, in particular the aging of the population, on the stability of debt policy and the socio-economic development of the state.