State debt of Ukraine: current realities and problems

Abstract

. The trends and factors of dynamic growth of the state debt of Ukraine in recent years are studied in given scientific paper. Public debt is formed as a result of borrowing financial resources by authorities on domestic and foreign markets with the purpose to finance innovation and investment programs, development of social infrastructure, overcoming the consequences of military operations, destructions in a result of natural disasters, and financing the state budget deficit. Certain advantages of the debt financing usage by the state as a tool for regulating economic processes are analyzed. Some classifications of public debt are studied, in particular, officially recognized and non-monetized (hidden), internal and external public debt. Certain advantages for government of administration of domestic public debt are analyzed. The factors of the increase of the state debt in modern conditions have been studied. The share of external debt to nominal GDP in selected European countries was studied and the necessity of increasing public spending to mitigate the negative effects of the Covid-19 pandemic on economic processes and the well-being of citizens in foreign countries was outlined. The dynamics of the internal and external public debt indicators in Ukraine and its rapid growth in the period 2014-2021 have been studied. This situation indicates that the country has actually fallen into a debt spiral. In such a situation, it is impossible to provide full service and repayment of the government's debt obligations at the expense of internal resources. The military actions of 2022 significantly worsened the quality of Ukraine's public debt, which will require the use of a complex of various instruments for its servicing. The analysis of the indicators of GDP and external debt of Ukraine per capita showed a relatively insignificant increase during the study period, however, in our opinion, the comparison of these indicators in dynamics is not entirely correct, since the population of Ukraine decreased by 10% during this period. Some practical tools for reducing the state debt and getting out of the "debt spiral" and the possibility of their implementation in Ukraine are analyzed. Attention was focused on the importance of restructuring the state debt in order to agree on the most favorable terms for debt service for all parties, the possibility to use the method of debt write-off and debt cancellation in the case when the country is unable to fulfill its obligations.