STATE DEBT: FORMATION TRENDS AND SOCIAL CONSEQUENCES IN UKRAINE

Abstract

The article examines macroeconomic trends and structural features ofpublic debt formation in Ukraine. During 2006–2018, the national debt ofUkraine has been growing steadily in UAH. And it is only in 2019 that there has been a tendency for its decrease for the first time. At the same time, in dollar terms, public debt fell slightly in 2015, driven by the depreciation of the UAH. In the structure of public debt, more than 85% falls on direct public debt. Since 2014, debt to external creditors has been predominant in the  structure of Ukraine’s public debt. Public debt per person in Ukraine in 2019 reached 47.4 thousand UAH. or $ 2,000 per person. The structure of direct external government debt is dominated by debt on the foreign market (56.6% in 2019) and loans from international financial institutions (31.4% in 2019).The largest creditors of Ukraine are the IMF, the IBRD, and the EuropeanCommunity. Public debt to GDP ratio in Ukraine since 2014 exceeds a certain critical level (60%). Social consequences of public debt in Ukraine have been identified. Increasing public debt is largely a factor in the decline in population employment and negative natural population growth, as it is an indicator of the state’s "poverty". In Ukraine, the increase in public debt is mainly driven by the need for the state to fulfill its social obligations in a state budget deficit, which only aggravates the problem of debt security in the long run. The priority areas of public debt management in Ukraine to ensure positive social change should be: favoring long-term borrowing; implementation of debt planning; tight control over targeted use of funds; stimulating economic growth and investment activity.