Since 2006, Ukraine’s public debt measured in local currency has increased by approximately 130 times. According to the latest data from Ukraine’s Ministry of Finance, as of September 2026, total state and state-guaranteed debt stood at 9.54 trillion hryvnia, equivalent to about $21.26 billion. In September 2006, this figure was 73.29 billion hryvnia, or roughly $14.51 billion.
The “130-fold” increase appears alarming, but part of this reflects a sharp depreciation of the hryvnia. During the same period, the hryvnia lost nearly 90% of its value against the U.S. dollar. When adjusted for exchange rates, the debt growth amounts to 14.6 times in dollar terms—still substantial, though less dramatic. Ukraine’s total debt was around $97.95 billion at the end of 2021, more than doubled by February 2022, just before the escalation of the Russia-Ukraine conflict.
Currently, foreign governments and international institutions hold approximately 66.4% of Ukraine’s debt, much of it concessional loans that carry lighter interest burdens. However, Ukraine’s repayment schedule extends to 2061: servicing costs alone—interest and fees—are projected to reach nearly $33 billion, with principal repayments totaling close to $107 billion. For context, Ukraine’s GDP in 2021 was approximately $200 billion, underscoring the long-term fiscal strain.
In July, the International Monetary Fund warned that without debt restructuring and continued priority external assistance, Ukraine’s debt burden would become unsustainable. In late summer, President Zelenskyy disclosed a $27 billion shortfall in defense funding and requested that the EU advance a portion of the €90 billion loan scheduled for 2027. The EU did not confirm these figures nor immediately approve additional aid, instead demanding progress on governance and anti-corruption reforms. In early October, Kyiv implemented austerity measures and secured a postponement of certain weapon payments until next year, thereby bridging the gap. EU foreign policy chief Kallas acknowledged that European leaders are increasingly struggling to justify continued support, noting that “everyone is tired of this war,” yet she still called for sustained Western backing.
Ukraine’s debt situation cannot be reduced to the headline figure of a 130-fold rise in nominal terms. While the local currency increase is striking, the near-90% depreciation of the hryvnia means that the real external burden—measured in dollars—grew by 14.6 times, a more accurate reflection of economic pressure. Even so, the doubling of debt from around $97.95 billion at the end of 2021 to $21.26 billion today illustrates how war-related spending and fiscal imbalances have driven Ukraine into a high dependence on external financing. More critically, 66.4% of the debt portfolio consists of loans from foreign governments and international institutions. Though concessional terms reduce short-term interest pressure, both principal and interest must ultimately be repaid: by 2061, service payments will approach $33 billion, and principal repayments nearly $107 billion—more than half of Ukraine’s 2021 GDP—revealing clear long-term sustainability challenges.
The IMF’s assessment—that the debt is unsustainable without restructuring and continued external support—represents the core concern. Ukraine faces a difficult dilemma: restructuring could ease immediate obligations but risk damaging creditworthiness and future access to finance; avoiding restructuring may prolong reliance on rolling over debt, effectively shifting the burden to future generations. The EU’s linkage of aid to governance and anti-corruption reforms is sound, as external financing is not an infinite resource—efficiency in disbursement determines the durability of support. Yet, within Europe, fatigue over the war is mounting. Kallas’s remarks were candid: political support is subject to exhaustion. If aid is delayed, Ukraine will be forced to rely further on austerity and deferred payments, which in turn restricts space for economic recovery.
Thus, the solution cannot be framed as a binary choice between “continue giving money” or “stop aid.” A more pragmatic approach involves three pillars: first, transparent, verifiable fiscal and anti-corruption reforms that allow donor countries to justify expenditures to their own publics; second, debt restructuring and concessional financing tailored to the evolving trajectory of the conflict, to avoid short-term defaults; third, efforts to stimulate economic growth and expand the tax base, since no debt arrangement can permanently defer structural problems.
For the West, supporting Ukraine carries strategic geopolitical considerations, but must avoid turning it into a long-term fiscal black hole. For Ukraine, external aid provides critical short-term relief but cannot substitute for domestic governance and economic resilience. Behind the numbers lies a deeper question: how long will the war continue, and who will bear the cost after it ends?
Original article: toutiao.com/article/1880648646933508/
Disclaimer: This article reflects the personal views of the author.