Assessment of Ukraine’s external debt burden under geopolitical instability

  • Received September 10, 2023;
    Accepted October 15, 2023;
    Published October 23, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/pmf.12(2).2023.06
  • Article Info
    Volume 12 2023, Issue #2, pp. 67-81
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Several specific features and circumstances can characterize Ukraine’s policy of external public debt management, and the results are not always unambiguous. The study aims to assess the effect of external public debt on Ukraine’s economy from 2014 to 2022, a period that includes the Crimea annexation, the onset of the COVID-19 pandemic, and the beginning of the open Russian military aggression. To analyze the contemporary state of public debt and assess the degree of external debt burden’s impact on the country’s economy, a factor analysis technique known as the principal components method was used. Via the STATISTICA.12 software, it was substantiated that the debt situation worsens with the growth of debt burden and solvency indicators as their values approach the thresholds. The application of the Kaiser criterion allowed the selection of the most influential indicators (principal components) for assessing the external debt burden. The eigenvalue of the first component (inflation rate) is 4.48, and it explains 50% of the variance; the second component (production of export-oriented goods) has an eigenvalue of 2.43, explaining 27% of the variance; the third component (government spending on military purposes) has an eigenvalue of 1.24, and it explains 14% of the variance.

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  • JEL Classification (Paper profile tab)
    H60, H63, G28
  • References
    30
  • Tables
    10
  • Figures
    10
    • Figure 1. Time series graph of the ratio of the State Budget Deficit to the GDP of Ukraine 2014–2022, %
    • Figure 2. Time series graph of the ratio of Gross External Debt to GDP of Ukraine 2014–2022, %
    • Figure 3. Dynamics of the Specific Weight of the State Foreign Debt in the Total Foreign Debt of Ukraine 2014–2022, %
    • Figure 4. Time series graph of the ratio of External Public Debt to Gross External Debt of Ukraine 2014–2022, %
    • Figure 5. Time series graph of the ratio of External Public Debt of Ukraine to Exports of Goods and Services 2014–2022, %
    • Figure 6. Time series graph of the ratio of Gold and Foreign Exchange Reserves to the External Public Debt of Ukraine 2014–2022, %
    • Figure 7. Time series graph of the ratio of external debt servicing costs to revenues of the State Budget of Ukraine 2014–2022, %
    • Figure 8. Time series graph of the ratio of the Costs of Servicing the External Debt of Ukraine to the Export of Goods and Services 2014–2022, %
    • Figure 9. Time series graph of the ratio of External Debt Servicing Costs to Ukraine’s GDP 2014–2022, %
    • Figure 10. Factor loadings of components (according to the Kaiser criterion)
    • Table 1. Composition and content of specified components (indicators of debt load)
    • Table 2. Dynamics of individual indicators of the formation of the economic potential of Ukraine for the period 2014–2022
    • Table 3. Dynamics of the values of absolute and relative indicators of foreign debt of Ukraine for the period 2014–2022
    • Table 4. Dynamics of indicators of the security of Ukraine’s foreign debt with foreign revenues and reserves for the period 2014–2022
    • Table 5. Dynamics of foreign debt service indicators of Ukraine for the period 2014–2022
    • Table 6. Output matrix for factor analysis
    • Table 7. Correlation matrix of debt load indicators
    • Table 8. Dispersions and contributions of the main components to the total variance
    • Table 9. Factor loads of the main components, unrotated
    • Table 10. Factor loads of the main components after rotation
    • Data curation
      Mila Razinkova, Natalia Nebaba
    • Investigation
      Mila Razinkova, Maxim Korneyev
    • Resources
      Mila Razinkova, Natalia Nebaba, Tetiana Yakovenko, Anna Bohorodytska
    • Validation
      Mila Razinkova, Tetiana Yakovenko
    • Visualization
      Mila Razinkova
    • Writing – original draft
      Mila Razinkova, Tetiana Yakovenko, Anna Bohorodytska
    • Formal Analysis
      Natalia Nebaba, Tetiana Yakovenko, Anna Bohorodytska
    • Methodology
      Natalia Nebaba, Tetiana Yakovenko, Anna Bohorodytska
    • Writing – review & editing
      Natalia Nebaba, Maxim Korneyev
    • Conceptualization
      Maxim Korneyev, Anna Bohorodytska
    • Project administration
      Maxim Korneyev
    • Supervision
      Maxim Korneyev
    • Software
      Tetiana Yakovenko