PUBLIC FINANCE IN ENSURING STABILITY OF THE COUNTRY’S FINANCIAL SYSTEM
DOI:
https://doi.org/10.15407/economyukr.2022.09.077Keywords:
public finances; state budget; financial system; budget expenditures; consolidated budget; functions of the state; socio-economic development of the countryAbstract
The structure of public finance in modern conditions is revealed. The dynamics of revenues and expenditures of both the consolidated and the State Budget of Ukraine in 2011–2021, as well as for five months of 2022, is studied. It is established that during the last decades, the budgets were executed with a significant deficit. With the beginning of the Russian Federation’s full-scale invasion of Ukraine, the problems of budget execution intensified. Since significant number of enterprises ceased their activities, serious problems with filling the budget and its execution in terms of expenditures arose. The decrease in revenues caused growing budget deficit and the need to find additional sources of finance to cover budget expenditures.
Author’s own definition of the term "stability of the financial system" is proposed. It is substantiated that inefficient management and use of budget expenditures is a destabilizing factor for country's financial system. It is emphasized that the National Bank of Ukraine, when assessing the stability of the financial system, should take this factor into account and analyze the relationships between the major players in the financial sector, including the public finance sector.
It is emphasized that in the conditions of martial law, it is necessary not to reduce budget expenditures, but to increase budget revenues instead. The ways to increase revenues through the introduction of a fair fiscal system are proposed. Emphasis is placed on the fact that in the system of public finance management, each institution must fulfill its unique role and all together they must ensure the harmony of relations, reliability, and effectiveness of the system. Budget expenditures should always be used rationally and efficiently, and in the conditions of martial law, focused primarily on the needs of the army, assistance to the victims, maintenance and restoration of critical infrastructure facilities, financing of protected budget items and priority areas of country's development.
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