Expert opinion

The war is slowly dragging Ukraine into a debt vice. However, the situation is somewhat eased by the fact that debt repayments are spread over a period of up to 35 years. What is the amount of international financial support? To whom and how much does Ukraine owe?

According to the Ministry of Finance of Ukraine, since the beginning of the full-scale invasion, Ukraine has received $105.9 billion in foreign financial assistance as of December 4, 2024.
Most of the funds were received from the European Union ($40.5 billion), the United States ($29.8 billion), and the IMF ($11.4 billion). Significant amounts of funding also came from Japan ($6.6 billion), Canada ($5.4 billion), the World Bank ($5.3 billion), and the United Kingdom ($2.6 billion). In total, 28 different countries and organizations financed the Ukrainian budget. In particular, $32.4 billion of foreign funds have been received since the beginning of 2024 (29.34% in the form of non-refundable grants and 70.66% in the form of loans, most of which are provided on preferential terms with long repayment periods and minimum interest rates).
In its October 2024 Inflation Report, the National Bank of Ukraine forecasts that by the end of 2024, the total amount of international financing will reach $41.5 billion, with $38.4 billion of aid expected in 2025 and $25 billion in 2026.
According to the Ministry of Finance of Ukraine, as of 10/31/2024, Ukraine's public and publicly guaranteed debt amounted to UAH 6,413.57 billion (or $155.37 billion). The external debt amounted to UAH 4,584.49 billion ($111.06 billion), which is 71.48% of the total debt.
At the same time, the public debt amounted to 95.65% of the total debt and amounted to UAH 6134.58 billion ($148.61 billion), including public external debt equal to UAH 4371.61 billion ($105.90 billion).
Of the public external debt as of 10/31/2024, UAH 628.23 billion (or $15.22 billion) was debt on 8 issues of external government loan bonds issued on 08/30/2024 in the process of restructuring previous issues of government Eurobonds and state-guaranteed Eurobonds of Ukravtodor (about $24 billion was restructured, including capitalized interest, resulting in a decrease in public debt by $9 billion). The new issues are scheduled to mature in 2029-2036.
As of 10/31/2024, the state-guaranteed debt amounted to UAH 278.99 billion ($6.76 billion), including external debt of UAH 212.88 billion ($5.16 billion).
According to the NBU, as of 10/31/2024, Ukraine's international reserves amounted to $36.58 billion.
Thus, the ratio of international reserves to external public and publicly guaranteed debt as of the beginning of November was 32.94% (compared to 39.83% at the beginning of 2024 and 54.09% at the beginning of 2022).
Compared to the beginning of 2024, the public debt increased by $9.35 billion (+9.19%), while reserves decreased by $3.93 billion (-9.71%).
Compared to the pre-war period (as of the beginning of 2022), the external public debt almost doubled (by $53.85 billion or 94.14%), and reserves increased by $5.64 billion (+18.23%).
The amount of public and publicly guaranteed debt available as of November 01, 2024 is more than 3 times higher than the amount of approved planned state budget revenues for 2024 and 2.6 times higher than the revised annual revenue plan. This indicates a high debt burden, but the pressure on the budget is somewhat mitigated by the rather long period allocated for the repayment of a significant share of external debt (a number of loans are granted for 30-35 years).
As of November 01, 2024, the total public and publicly guaranteed debt amounted to 85.69% of the expected GDP for 2024, and the amount of external public and publicly guaranteed debt was 61.25%.
For comparison, at the beginning of 2022, the total debt for 2021 in actual prices amounted to 50.49% of GDP, and the ratio of external debt to GDP was 29.48%.
According to the public debt repayment schedules published by the Ministry of Finance, based on the existing agreements as of October 01, 2024, the projected payments on the public debt of Ukraine, including servicing and repayment, in Q4 2024 will amount to UAH 263.68 billion (of which UAH 58.59 billion is planned for external debt repayment). Total payments on public debt in 2024 will amount to UAH 1425.43 billion, including UAH 833.5 billion planned for servicing and repayment of the external debt. The ratio of planned payments on public debt to the planned state budget revenues for 2024 is 74.57%.
The projected payments for 2025 amount to UAH 933.41 billion. This includes UAH 286.32 billion of payments on the external public debt. The ratio of planned payments on budget debts to the planned amount of state budget revenues for 2025 is 40.11%.
According to the forecast of payments for 2026-2037 prepared by the Ministry of Finance on the basis of agreements concluded as of October 1, 2024, in the following years their volumes will tend to decrease, but in 2034 and 2035, a higher burden is envisaged than in 2028-2033.
For more detailed information in tabular and graphical form, please see the appendix to this material

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Conclusions.

Ukraine currently has a very significant debt burden. To reduce it, it is necessary to actively attract grant funds and strategically seek compensation through the confiscation of the aggressor state's assets. There have already been some moves in this direction: on December 10, the United States announced a $20 billion loan to Ukraine under the G7 Extraordinary Revenue Acceleration (ERA) Loans initiative. The funds will be used to support the Ukrainian economy and rebuild infrastructure, and the source of repayment will be the proceeds of frozen Russian assets.

Sources used:

• NBU website
  
• Website of the Ministry of Finance of Ukraine
  
• Website of the State Statistics Service of Ukraine
  
• Website of the Verkhovna Rada of Ukraine
  
• State web portal of the budget for citizens

Reference:

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