Danylo Hetmantsev explained why Ukraine’s public debt increased by 5%, reaching $180 billion

In recent months, the topic of Ukraine’s national debt has been causing more and more public concern. After a series of reports on the rapid growth of external liabilities, social networks and mass media began to raise questions about the limit of debt sustainability, the risks of dependence on international creditors and the threat of a new debt crisis. These discussions became especially acute after the Ministry of Finance published data on the results of April 2025: the public debt exceeded 180 billion dollars. In order to explain the nature of this growth, the sources of financing and the legal specificity of the new debt instruments, the Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev, provided in his Telegram channel clarification on this occasion.

He reported that in April 2025, the public debt of Ukraine increased by 5%, reaching 180 billion US dollars. According to him, according to the official data of the Ministry of Finance, as of April 30, 2025, the state and state-guaranteed debt in hryvnia equivalent amounted to 7,480.3 billion hryvnias, and in foreign currency equivalent – 180 billion US dollars.

He specified that only in April the total amount of debt increased by 357.1 billion hryvnias, or by 5% in hryvnias, and by 8.2 billion dollars, or by 4.8% in foreign currency. At the same time, Hetmantsev emphasized, for the period from January to April 2025, the total growth of the debt was 7.3% in hryvnia equivalent (+499.3 billion UAH) and 8.4% in foreign currency (+13.9 billion dollars).

Hetmantsev emphasized that almost the entire amount of the increase in the national debt in currency terms — namely, $13.1 billion — is owed to the European Union. He explained that this growth is caused by three main factors.

He called the strengthening of the euro exchange rate against the US dollar the first factor. Hetmantsev noted that since the beginning of the year, the euro exchange rate has grown by more than 10%, which, in turn, caused a technical revaluation of the dollar equivalent of already issued debt denominated in euros. According to him, this is an accounting revaluation that affects the total figure, but does not create an additional burden on the budget.

The second source of debt growth, as Hetmantsev noted, was the attraction of financing within the framework of the G7ERA (Extraordinary Revenue Acceleration for Ukraine) initiative. He clarified that these are so-called conditional debt obligations. Hetmantsev explained that according to the Budget Code of Ukraine and the terms of the agreement with the European Union (it is about the Credit Cooperation Mechanism — ULCM), such loans are not serviced and are not repaid at the expense of the state budget of Ukraine. They are planned to be repaid at the expense of profits received from frozen Russian assets.

In addition, Hetmantsev emphasized that the creditor — in this case, the EU — has a limited right to demand the return of such loans. He noted that such a right arises only under certain conditions, in particular, if Ukraine receives reparations for damage caused by the war from the Russian Federation.

The third source of debt growth, according to Hetmantsev, was the attraction of macro-financial assistance from the European Union in the amount of 3.3 billion US dollars. He emphasized that this amount was provided within the scope of the Ukraine Facility instrument — a long-term soft loan, on which interest is paid not by the Ukrainian budget, but by the European Union itself. Thus, he noted, Ukraine receives direct financing on conditions as close as possible to grant conditions.

Hetmantsev also commented on the situation with the internal state debt. He drew attention to the fact that, despite the general increase in aggregate debt, direct domestic public debt decreased during the first four months of 2025. In hryvnia equivalent, this debt decreased by 1.8% or by 33.4 billion hryvnias. As Hetmantsev explained, this happened due to a decrease in the volume of placement of domestic state loan bonds (OVDP) at auctions.

He also cited the structure of the national debt of Ukraine as of the end of April 2025:

– 74.5% of the state debt is foreign debt;
– 25.5% — internal;
– 76.4% of the debt is denominated in foreign currency (i.e. external debt and currency government bonds),
– 23.6% — in hryvnia;
– 67.7% of the debt has a fixed interest rate,
– 32.3% — with variable.

Analyzing these indicators, Hetmantsev emphasized that the general dynamics are not a sign of a debt crisis. On the contrary, in his opinion, the current level of debt and its structure remain manageable and predictable. He especially emphasized that the new forms of financing, attracted from the EU in 2025, are not ordinary loans, but instruments with a high degree of preferential treatment, where the main risks fall not on Ukraine, but on the international community.

In addition, Hetmantsev made it clear that the increase in debt is a logical consequence of a long war, which requires significant spending on defense, economic support, and social programs. At the same time, he emphasized, thanks to international support, especially from the European Union, Ukraine is able to service its obligations without the threat of default or loss of macro-financial stability.

Danylo Hetmantsev drew attention to the fact that during the first four months of 2025, the growth of the national debt of Ukraine occurred mainly due to the increase in obligations to the European Union. He explained that the main reason for this was operations within the ULCM mechanism — credit cooperation with the EU within the framework of the G7 ERA initiative. According to Hetmantsev, these are conditional debt obligations, which are technically considered as direct debt, but are not serviced from the state budget of Ukraine. Their repayment, as he emphasized, is carried out at the expense of profits from frozen Russian assets.

According to the data of the Ministry of Finance, which Hetmantsev referred to, during the reporting period — from January to April 2025 — Ukraine received approximately 7 billion dollars within the framework of the ULCM mechanism, part of which came from the EU, part from Canada.

In addition, he noted that the growth of the state debt was also influenced by the receipt of macro-financial assistance from the EU and the strengthening of the euro exchange rate, which caused a technical revaluation of foreign currency liabilities in the dollar equivalent.

Summarizing, Hetmantsev proposed to the Ministry of Finance to expand the structure of public debt statistics, by separating the part related to conditional debt within the framework of the G7 ERA initiative. He believes that such financing is now counted as direct debt, although in fact it is conditional in nature, and this difference is not recorded in the statements. In his opinion, this complicates the assessment of the real sustainability of the public debt and the analysis of the debt burden, so such a change in the presentation of data would make the statistics more transparent and justified.