According to estimates, Ukraine will need borrowing on the order of trillions of hryvnias during 2027–2029 to cover its budget needs, while the public and government-guaranteed debt could exceed 114% of GDP over this period. This was stated by People's Deputy Olena Vasilevska-Smahlyuk, as reported by RBC-Ukraine, while commenting on the new Medium-Term Public Debt Management Strategy for 2027–2029. The document enshrines a large-scale dependence of the budget on external financing and effectively confirms the critical role of international, above all European, support in ensuring the country's fiscal sustainability over the next three years.

Key parameters of the strategy

According to the calculations set out in the strategy, the budget's financing needs in the coming years are to be covered to a large extent by external borrowing. Over the 2026–2028 period, its share, according to the figures cited by the deputy, should amount to around 80% of all needs, falling to 67% by 2029. Meanwhile, payments for the servicing and repayment of public debt in 2026–2029, under the baseline scenario, are expected to average UAH 1.27 trillion per year. The budget deficit is planned to be gradually reduced — to 5.5% of GDP by 2029.

Dependence on European support

The European Union remains the key source of financing in the strategy: by estimate, it is to provide around two-thirds of Ukraine's financing needs in 2027–2029. "The strategy explicitly notes that European support is to cover about two-thirds of Ukraine's financing needs in 2027–2029," Vasilevska-Smahlyuk emphasized. To curb the growth of the debt burden, priority is given to concessional loans and the maximum share of grant financing, which allows the borrowing structure to be made cheaper and the budget's interest-payment load to be reduced.

Debt burden and deficit

Under the baseline forecast, the public and government-guaranteed debt will rise to 114.2% of GDP in 2028, after which it is to fall to 108.7% of GDP in 2029. Thus, the peak of the debt burden, according to the document, falls in 2028, and the subsequent decline is achieved through a combination of deficit reduction and the financing structure. These figures, however, remain significantly above the levels usually considered sustainable for countries with a comparable level of development, which makes the dependence on external conditions particularly sensitive.

Inconsistent data

The publicly stated figures contain a discrepancy in the chronology of the periods to which they are calculated. The strategy itself is titled as a document for 2027–2029, and it is to this period that the key estimate on the share of European support (around two-thirds of needs) is attributed. At the same time, the indicator of the share of needs covered by external borrowing (around 80%) and the average annual volume of debt-servicing payments (UAH 1.27 trillion) are, in the public comment, tied to an earlier window — 2026–2028 and 2026–2029 respectively. In other words, some parameters describe a period that partially extends beyond the strategy's headline horizon. This creates a discrepancy over which exact figures relate to the "clean" 2027–2029 period and which include 2026, and requires verification against the original source of the document.

The main "but": the security premise

The entire forecast, as the deputy separately emphasized, is built on one critical assumption — a substantial improvement in the security situation starting in 2027. "But there is an important 'but' here: this entire forecast is built on the assumption of a substantial improvement in the security situation starting in 2027," said Vasilevska-Smahlyuk. This means that all calculations on the deficit, the debt burden and the borrowing structure are conditional: in the event of the persistence or deterioration of the military-fiscal conditions, the budget's actual needs and the dynamics of the debt could deviate significantly from the baseline scenario, and the dependence on external sources could intensify.