Public Debt Policy and Debt Security in the Context of Post-War Recovery

Debt security is a critically important component of the state's financial security. In wartime, Ukraine significantly increased its public debt, faced a significant budget deficit, and began to attract international financial assistance to finance strategically important areas. All these processes require updating the financial and credit policy principles and implementing long-term financial stability instruments. This study aims to identify the main trends in the development of Ukraine's public debt policy in the context of the challenges of martial law and post-war economic recovery to outline strategic directions for increasing the state's debt security. The researchers analyze the dynamics of key macroeconomic indicators that characterize the country's level of debt security and assess the impact of internal and external factors on the debt burden in the short and medium term. The study covers the period from 2005 to 2024, offering a forecast of the dynamics of servicing Ukraine's external, internal, and total public debt until 2046. The study used three key scientific methods: econometric, graphical, and system analysis. The relationships between the main parameters of debt policy were analyzed using the econometric VAR model. The results showed that external debt has the most significant impact on the debt burden. At the same time, the growth of reserves contributes to its reduction, which confirms their role as a stabilizer of the financial system. An assessment of the impulse responses of the system revealed that a short-term shock in external debt leads to an increase in total debt to GDP by 0.18%. On the other hand, an increase in government bond yields negatively affects the debt burden due to a rise in the cost of borrowing. The variance decomposition showed that internal factors explain 45% of the fluctuations in the debt burden, and external debt, reserves, yields, and domestic bonds influence the rest. To ensure financial stability and maintain investor confidence, Ukraine should integrate debt policy with fiscal and monetary instruments, as well as strengthen coordination between key financial institutions – the Ministry of Finance of Ukraine, the National Bank of Ukraine, parliamentary committees and the Accounting Chamber, to form an effective system for monitoring debt risks. Public debt policy should be based on transparent decisions focused on long-term financial sustainability, which meets the needs of post-war reconstruction and the strategic goals of sustainable development of Ukraine.