Government Approved Ukraine's Medium-Term Public Debt Management Strategy for 2026–2028

The Cabinet of Ministers of Ukraine has approved the Medium-Term Public Debt Management Strategy for 2026–2028 — a document developed by the Ministry of Finance for a systematic assessment of the current status and dynamics of the state debt of Ukraine and definition of objectives, targets and tasks over the medium term to optimize state debt structure from a cost/risk perspective while bringing the country on the path to a more sustainable debt trajectory.

The significant increase in state budget expenditures for defense caused by the full-scale russian war has led to a sharp rise in the budget deficit. As a result, the volume of public debt has grown substantially, and under such conditions the main goal of public debt management has become the minimization of long-term risks associated with this increase.

The Strategy defines three main objectives of debt policy for 2026–2028:

1. Increasing the share of grants and other non-debt financing to ensure the funding of the state budget.

2. Reducing debt risks by lowering the cost of debt, extending the maturities of debt obligations, and optimizing their structure.

3. Maintaining relations with investors and promoting the development of the domestic government bond market as a tool for economic recovery.

According to the Strategy, Ukraine continues to work on reducing key debt risks. Refinancing risk is decreasing due to the extension of government bond maturities, the attraction of concessional resources, and the conducting debt management operations. Currency risk remains significant because of the high share of debt denominated in foreign currency; therefore, increasing the share of hryvnia-denominated borrowing in the long term is a strategic priority. Interest rate risk is currently low due to the substantial share of long-term concessional debt with a fixed interest rate. Risks related to contingent liabilities are under control: the volume of loans backed by state guarantees is declining, and the restructuring of state derivatives has just been successfully completed.

The adoption of the Strategy is an important step toward Ukraine’s financial stability, as it ensures predictability of debt policy, strengthens the confidence of international partners and investors, and sets clear guidelines for public debt management in wartime conditions.

The adoption of the Strategy is also an obligation of Ukraine to the EU under the Ukraine Facility: item 2.6 of Ukraine’s Plan outlines the need to reform the public financial management system, including updating the debt strategy.