Will the record-high national debt hit Ukrainians’ pockets?
3 February 16:47
РОЗБІР ВІД 
By the end of 2025 , Ukraine’s public and state-guaranteed debt had reached 9.04 trillion hryvnia ($213.3 billion). It had grown by nearly 30% over the course of the year . The main reasons were the financing of the war and the securing of concessional loans from international partners.
Economist Andriy Novak explains in a comment to "Komersant Ukrainian": debt growth during a full-scale war is inevitable and does not in itself mean an immediate deterioration in the lives of Ukrainians, but it has long-term consequences.
What the numbers say
- 9,042.7 billion UAH — Ukraine’s total national debt at the end of 2025
- 29.5% — annual growth in hryvnia terms
- about 75% of the debt is external
- over 50% of external debt — obligations to the EU
- $37.9 billion — G7 loans in 2025
- $12.1 billion — funding from the European Union
What this means for Ukrainians
According to Novak, there is no direct link between the growth of public debt and citizens’ standard of living. At the same time, there is an indirect impact.
All government expenditures—from both the central and local budgets—come from a single source: taxes paid by citizens and businesses.
Each year, a portion of the budget goes toward:
- debt servicing (principal and interest);
- social benefits—pensions, assistance, and subsidies;
- defense and security.
The more funds are directed toward debt, the less remains for social programs.
Debt and War
Ukraine currently allocates about half of its budget expenditures to defense, while the other half covers all other needs, including social ones.
“Despite the fact that Ukraine receives a great deal of aid—either in the form of grants or direct material and technical assistance—it is still forced to cover part of its military equipment and necessary operating expenses from the state budget using its own budget revenues, as well as through new debt issuance, including both domestic and foreign debt. Therefore, of course, during the war—and as long as it continues—it should come as no surprise that the national debt will grow,” says Novak.
According to President Volodymyr Zelenskyy’s estimate, one year of war costs Ukraine about $120 billion.
The government forecasts:
- an increase in the debt-to-GDP ratio to 106%;
- nominal debt to exceed 10 trillion hryvnia.
Why current debt levels aren’t the worst-case scenario
The Ministry of Finance emphasizes: a significant portion of the debt consists of concessional loans; EU loans under the Ukraine Facility program have a repayment deferral of 11–12 years, and the interest on them may be covered by the European Union itself.
ERA loans are planned to be repaid using proceeds from frozen Russian assets, not from Ukrainian taxes.
What will happen after the war
Andriy Novak believes that after the war ends, Ukraine should raise the issue of full debt forgiveness.
The full write-off of Ukraine’s national debt is a meager, minimal token of gratitude, first and foremost from European countries to Ukraine for the fact that there is no war and there has never been a war on their land, on their territory, in their countries. Therefore, whatever government is in power in Ukraine after the war—regardless of its political affiliation or the names of its leaders—must make the complete write-off of Ukraine’s national debt one of its first economic priorities. In this way, we will be able to lift this debt burden from Ukrainians and future generations of Ukrainians.
In his view, this will allow more budget funds to be spent on increasing social benefits, that is, raising the standard of living for Ukrainians.
