STATUS OF DEBT SECURITY IN UKRAINE UNDER MARTIAL LAW

Abstract

In the study, the authors examine the state of Ukraine’s debt security under martial law conditions.
In the main part of the study, the authors substantiate the meaning of the concept of «debt security» and highlight the factors influencing its dynamics. The analysis of debt security and the identification of key risks and problems were conducted based on data from 2019 to 2023 and the first 10 months of 2024.
The debt structure reveals a significant predominance of external borrowing over domestic borrowing. Growing dependence on external borrowing creates additional risks for Ukraine’s economy, particularly during exchange rate fluctuations or adverse changes in international financial market conditions.
The calculation of the main indicators of debt security showed that they significantly exceeded their optimal or, more precisely, critical values across all indicators. The final part of the study identifies the main problems affecting Ukraine’s debt security based on the analysis: growing dependence on external debt; increasing the debt burden on the economy; high interest rates on domestic borrowing; and a general decrease in economic activity and budget revenues.
To enhance debt security, the authors propose the following measures: diversification of funding sources—reducing dependence on external debt through the development of the domestic borrowing market; ensuring greater transparency in debt management—implementing more detailed mechanisms for planning and monitoring debt policy; optimizing the debt structure—reducing the share of short-term loans and increasing the share of long-term loans; strengthening foreign exchange reserves—preserving and increasing the country’s gold and currency reserves; attracting foreign investments and supporting businesses—increasing state budget revenues through a favorable investment environment and business support; and implementing a budget deficit reduction policy—reducing inefficient expenditures and increasing revenues.