Assessment of Ukraine’s external debt burden under geopolitical instability

Abstract

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.

Impact of the Russo-Ukrainian war on Black Sea trade: Geoeconomic challenges

“…The importance of political neighbourhoods and geography in geoeconomics are decisive for understanding transformations (Ambroziak & Stefaniak, 2022;Razinkova et al, 2023;Kozlovskyi et al, 2024). Therefore, the geographical location of the Black Sea offers not only the advantage of an east-west trade corridor but is currently vulnerable to this war, being subjected to belligerent behaviour that maximises regional risks.…”

Analyzing the Influence of Foreign Debt on Non-Oil Economic Growth: A Case Study of Iraq Using the Autoregressive Distributed Lag (ARDL) Model from 2003 to 2022

“…The study (Korneyev et al 2023) aims to assess the impact of external public debt on Ukraine's economy from 2014 to 2022. There are several specific features and circumstances that can characterize Ukraine's foreign policy.…”

“…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 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, which explains why14% of the variance (Korneyev et al 2023).…”

“…The Breusch-Godfrey Serial Correlation LM test is conducted to assess whether there is serial correlation in the residuals of the model, as indicated in Table (4). Serial correlation occurs when the residual values are correlated with their lagged values, suggesting a potential violation of the independence assumption in the regression model.…”

Effect of Ukraine’s public debt management on its macroeconomic development: VAR modeling

“…Increased military expenditures, higher government spending, and lower revenues have led to the sharp growth of public debt as the government seeks additional ways to finance these costs. Consequently, an efficient system of public debt management is vital for ensuring Ukraine's macroeconomic stability during wartime (Razinkova et al, 2023a(Razinkova et al, , 2023b.…”