Government approves medium-term public debt management strategy for 2026–2028

The Cabinet of Ministers has approved the Medium-Term Public Debt Management Strategy for 2026–2028 – a document developed by the Ministry of Finance to systematically assess the current state and dynamics of public debt, define the objectives and tasks of debt policy for the medium-term perspective, and optimise the debt structure with regard to costs and risks.

The full-scale war has caused a substantial increase in state budget expenditures on defence, leading to a sharp rise in the budget deficit. As a result, the volume of public debt has grown significantly, and in these conditions the primary objective of public debt management has become the minimisation of long-term risks arising from such growth.

The Strategy sets out three main objectives for debt policy in 2026–2028:

• Increasing the share of grants and other non-debt financing to ensure the funding of the state budget.
• Reducing debt risks by lowering the cost of debt, extending the maturities of debt obligations, and optimising their structure.
• Maintaining relations with investors and promoting the development of the domestic market for government bonds as an instrument for economic recovery.

According to the Strategy, Ukraine continues to work on reducing key debt risks. Refinancing risk is being lowered through the extension of the maturities of government bonds, attraction of concessional resources, and debt management operations. Currency risk remains significant due to the high proportion of debt in foreign currency, so a strategic priority is the gradual increase in the share of hryvnia-denominated borrowings in the long term. Interest rate risk is currently low thanks to the substantial share of long-term concessional debt with fixed rates. Risks related to contingent liabilities are under control: the volume of loans under state guarantees is being reduced, and the restructuring of state derivatives has recently been successfully completed.

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

The adoption of the Strategy is also a commitment by Ukraine to the EU under the Ukraine Facility: point 2.6 of the Ukraine Plan stipulates the need to reform the public finance management system, including updating the debt strategy.