Public debt of Ukraine: Essence, current trends and management

Abstract

At the present stage of the market economy, in the conditions of rapid development of globalisation and cooperation of states in political, economic, and social aspects, public debt is an objectively determined phenomenon, it is an integral part of the country’s financial system. Nowadays, Ukraine is in a difficult situation caused by the outbreak of a large-scale war with russia, which is one of the main reasons for the existence of the public debt. Due to the insufficient amount of monetary resources in the budget, the state is forced to attract financial resources in order to perform its functions. The purpose of this study was to substantiate the theoretical essence of public debt, analyse current trends in the generation of public debt, and identify optimisation ways for effective public debt management in order to reduce it. The authors used the following scientific methods: empirical (description and comparison), theoretical (analysis, synthesis, and generalisation), and statistical. The study considers the essence of public debt according to the views of foreign and Ukrainian researchers. Based on statistical data, the current state of the public debt of Ukraine is characterised, and the dynamics of the public and government-backed debt for the period 2019-2022 are analysed. The volume of expenditures on repayment and servicing of the public debt of Ukraine is analysed. Based on the conducted research, the main reasons for the presence and growth of debt were identified, including the COVID-19 epidemic and the beginning of armed aggression on the part of russia; a decrease in the exchange rate of the national currency; a decline in production and a reduction in tax revenues; a decrease in the volume of the gross domestic product in real terms; a state budget deficit and a negative balance of payments; an increase in spending on ensuring the country’s defenсe capability and servicing public debt. The proposed recommendations would reduce the country’s public debt and increase the competitiveness of the economy at the world level, namely: increase the level of GDP, stimulate the development of small and medium-sized businesses to increase tax revenues to the budget, develop an effective strategy for managing public debt, etc.