Hrubliak Oksana, Candidate of Economic Sciences, Associate Professor of the Department of Public, Corporate Finance and Financial Intermediation, Yuriy Fedkovych Chernivtsi National University, Chernivtsi, Ukraine

e-mail: grubliakomo@gmail.com
ORCID: 0000-0002-7198-9747

Analysis of state budget policy in the sphere of public debt

Abstract. Introduction. One of the most important factors in the macroeconomic system of each country is a public debt. This is due to the processes of formation of public debt and its servicing. Public debt has a significant impact on the financial system, investment climate, currency stability and the rating of the state in the international market.

Purpose. Analysis of the public debt and indicators of debt security of the state with the aim to develop measures to improve debt and fiscal policy in the field of debt obligations.

Results. The debt situation in Ukraine during the last years is characterized by the excessive increase in debt load mainly due to external borrowing, irrational use of borrowed funds, and pressure on Ukraine’s economy. To assess the solvency ratio defined budget public external debt to exports of goods and services that characterizes the country’s ability to cover debt currency revenues from exports. Index exceeded the norm in 2016 – 2017 years, indicating that the insolvency of Ukraine. The critical indicator of the state debt in relation to GDP and the tendency to the increasing of external debt, reducing the possibilities of its servicing, testifies the urgent need to take measures to improve the budget policy in the area of debt obligations, minimize debt and revitalize the Ukrainian economy.

Conclusions. The state of Ukraine’s debt security is threatening, since the calculated values of most indicators exceed the boundary criteria approved by the Maastricht Treaty, the International Monetary Fund and the World Bank.  If the government wants to ensure an effective public debt management policy, it should clearly define the debt management strategy, and the objectives of the debt risk management system. This is the only way to reduce the costs of debt repayment, which will positively affect the country’s economic development. The analysis of macroeconomic indicators showed that the main part of loans is not invested, but is intended to cover the budget deficit. Such a tendency of rapid debt growth not only stops the economic growth, but constantly increases the burden of debt and reduces potential investment and economic growth.

Keywords: public debt; guaranteed debt; foreign debt; debt security; debt security indicators.

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