War in Ukraine: International Financial Support and Public Debt

Topicality. The full-scale invasion of Ukraine created a crisis in all areas: the need for immediate military and administrative decisions, waves of migration, economic difficulties, logistical disruptions, rising fuel and food prices, an energy crisis and a reduction in budget revenues. This has led to a reduction in economic activity and increased dependence on international aid. However, the rising debt burden poses risks to the country's fiscal sustainability in the medium and long term. Aim and tasks. The purpose of the article is to determine the impact of the country’s debt burden under martial law on Ukraine’s ability to fulfill its obligations. The objectives are to identify the main sources of financing, the terms of assistance and the potential risks associated with debt growth. Materials and Methods. To quantify the amount of financial assistance, we used the Ukraine Support Tracker as the main information and statistical source, which contains a list and quantitative assessment of military, financial, and humanitarian assistance to Ukraine in the context of the russian war. The study reviews pledged financial assistance by type, donor, and time, adjusted for GDP, analyses the ratio of public debt to budget revenues, and compares data on debt and quality of life. A structural analysis of the NBU debt with a forecast of the payment burden was also carried out. Research results. Using the Data Set we study the types of announced bilateral and multilateral financial international assistance, its main donors, transfer mechanisms, goals, volumes and structure, and the dynamics of receipts over time. Our analysis shows the total amount of such macro-financial assistance and the terms of repayment of a part, which is provided on credit terms and increases the volume of public debt. Using a correlation analysis, we traced the relationship between public debt and the Quality of Life Index. The results show that an increase in public debt will haven’t a significant impact on the quality of life in Ukraine, but we can expect a significant decrease due to military operations. Conclusion. The aggression has disrupted Ukraine's stability and financial sustainability, forcing the international community to join forces to provide military, humanitarian and financial support. An analysis of pledged bilateral and multilateral aid highlighted the main types of support and donors, with a detailed presentation of the dynamics over the period. The debt-to-GDP ratio has remained at 60% over the past decade, and the share of foreign revenues has increased from 0.06-1.51% to over 25% in 2022. At the same time, state budget expenditures on debt service were significantly lower than projected domestic and foreign debt repayments. This may put an excessive burden on state budget expenditures. However, this will not have a significant impact on the quality of life in the country.