Ukraine's Cabinet of Ministers has approved a medium-term strategy for managing the country's public debt, projecting that state and state-guaranteed debt will peak in 2028 at 114.2% of gross domestic product, the Ministry of Finance announced on Thursday.
The strategy, which covers the period from 2027 to 2029, is the government's core document for setting the priorities and main measures of its debt policy, according to the ministry.
Under the plan, debt will keep climbing through 2026, 2027 and 2028 before turning downward, falling to 108.7% of GDP in 2029.
From 49% before the war to over 100%
Before Russia's full-scale invasion, Ukraine's public debt stood at just 49% of GDP. By the end of 2025, it exceeded the 100% mark for the first time, reaching 101.2%.
The International Monetary Fund's long-term target for Ukraine is a debt level of 68% of GDP by 2035. The IMF has backed Ukraine with financial support since the invasion began, and its debt sustainability benchmarks are used by international lenders to judge how manageable the country's borrowing is over the long run.
Budget financing needs drive the increase
The main reason debt will keep rising in the coming years is extremely high budget financing needs, which are expected to peak in 2027 at 2.746 trillion hryvnias, equivalent to about $61 billion, according to the strategy.
A reduction in the debt level in 2029 would only be possible if the war ends in 2027, the ministry said.
Favourable loan terms ease the burden
Despite the projected peak in the debt-to-GDP ratio, the strategy states that Ukraine has avoided critical pressure on its budget thanks to exceptionally favourable borrowing conditions.
The weighted average cost of the country's total state debt is just 4.6%, while the cost of its external debt is 1.9%. State and state-guaranteed debt covers direct government borrowing as well as loans backed by state guarantees. The weighted average time to maturity across the debt portfolio is 13.4 years, the ministry said.
Central bank sees a lower peak
The National Bank of Ukraine revised its macroeconomic forecast in August 2026 and now expects state and state-guaranteed debt to fall to about 90% of GDP over the forecast horizon, a lower trajectory than the government's own projection.
