Correcting the social media claims
Social media posts claim Ukraine faces $33bn in annual interest, but I find this figure misleading. Ukraine plans to spend $11.3bn (UAH 513bn) on interest on its state debt this year. Finance Ministry execution data shows the state budget paid $6.1bn (UAH 275.7bn) of that amount by the end of September. Fitch Ratings, which affirmed Ukraine at ‘CCC’ on October 23, puts the country’s additional external financing need in 2027 at $33bn. This total external financing need is a different metric than the "debt service" line in the budget. Most money for interest does not leave the country because UAH 190.4bn ($4.2bn) is for external debt and the rest is for domestic borrowing.
Interest payments have risen fast, more than tripling from $4.4bn (UAH 159.7bn) in 2022, and they remain a small part of total spending because defense and security took $44.3bn (UAH 2.01 trillion) of state general-fund spending between January and September.
I find the debt trajectory concerning. Annual interest payments are 20 times their 2011 level. The 2027 budget, which passed its first reading on October 28, cuts debt service to $10.4bn (UAH 474.1bn). The draft 2026 budget sets repayments at $14.5bn (UAH 656.8bn), meaning interest and principal together come to about $25.8bn (UAH 1.17 trillion).
Debt scale and funding gaps
The scale of the debt is massive. General government debt rose from $15.9bn (UAH 80.5bn) at the end of 2006 to $225.7bn (UAH 9.57 trillion) at the end of 2025, a 119-fold increase according to the IMF’s World Economic Outlook database. Much of this growth comes from the currency, as the hryvnia lost nearly 90% of its value against the dollar since 2006. As a share of the economy, debt climbed from 14% of GDP to 107% in three distinct jumps. The IMF sees an uncovered gap of $30bn-35bn for the coming year.
| Category (2026) | Value (USD) |
|---|---|
| Debt interest | $11.3bn |
| Debt principal | $14.5bn |
| External interest | $4.2bn |
| External principal | $2.9bn |
Ukrainian banks and the National Bank of Ukraine (NBU) hold most hryvnia government bonds. The stock of hryvnia bonds is UAH 1.99 trillion ($43.9bn), with Ukrainian banks holding UAH 922bn ($20.3bn) and the NBU holding UAH 656bn ($14.5bn). Non-residents held just UAH 16.8bn ($370mn) in June. Foreign creditors are mostly governments and institutions lending on soft terms, with the EU being the largest single creditor with a 38% share. I see no way around the fact that the debt is growing.
