Natalia Sytnyk, Doctor of Economic Sciences, Professor, Professor of the Department of Financial Management, Ivan Franko Lviv National University, Lviv, Ukraine

ORCID ID: 0000-0003-4138-9721
e-mail: nataliya.sytnyk@lnu.edu.ua

Bohdana Kravchenko, Master of the Department of Financial Management, Ivan Franko Lviv National University, Lviv, Ukraine

e-mail: kravcenkobogdana120@gmail.com

Financial Security of the State: Threats and Challenges in the Conditions of War

Abstract. Introduction. In conditions of constant instability, the state cannot protect its national economic interests, which leads to a critical drop in the level of its financial security. Such trends cause an urgent need to find ways to increase the level of financial security of the state and ensure the stability of the entire economic system. In the conditions of martial law, it is important to identify threats to the financial security of Ukraine and develop a strategy for their neutralization and improvement of the effectiveness of financial security. In general, our state is characterized by threats associated with the weakness of the financial system and ineffective regulation and control.

Purpose. The purpose of the study is to identify and analyze potential threats to the financial security of the country in the conditions of a full-scale invasion of Russia, as well as to evaluate the main indicators of the financial security of Ukraine.

Results. Based on the analysis of threats and challenges to the financial security of the state, as well as the assessment of indicators of the state’s financial security, certain conclusions can be drawn. The main threats to the financial security of the state are: debt burden on the state budget, price disparities, limitation of the list of debt instruments, provision of international reserves, dependence on foreign capital, level of creditworthiness of enterprises and risky credit policy, reduction of labor potential, physical and/or financial shortage of the most important resources and material and technical support, making it impossible to carry out economic activities in large areas. Such phenomena arise as a result of military actions and lead to serious challenges for the financial security of the country. According to the results of the study, during the last decade the level of financial security was assessed as unsatisfactory, as the average value of its assessment during this period was only 42%. However, the National Bank of Ukraine managed to ensure a sufficient level of financial stability for the effective performance of its tasks and ensuring the stability of the financial system in the conditions of the crisis caused by the war. Analysis of the dynamics of the ratio of the total public debt to the gross domestic product of Ukraine showed quite unstable dynamics. Both the total public debt and the GDP of Ukraine are growing. Instead, their ratio has a negative trend. The dynamics of the budget deficit showed a growing trend and its high level, which could become a risk for the future, causing a potential default and thereby threatening the financial security of the state. The dynamics of international currency reserves showed that Ukraine has a sufficient amount of international reserves to further ensure the financial security of the state. In connection with the full-scale invasion of Russia into Ukraine, the indicators of the financial system during 2020-2022 do not meet the normative values: the debt burden on the state budget has increased, the inflation rate is increasing annually and exceeds the norm, the dependence of the domestic banking system on foreign capital, the level of credit policy risk is monitored significantly higher than the standard, the volume of lending by banks of the real sector of the economy does not reach the standard value. According to the conducted research, recommended measures are given to minimize threats to the financial security of the state and increase its level.

Conclusions. In the difficult conditions of the protracted war, the financial security of Ukraine faced a number of threats and challenges. Based on the conducted research, it is proposed to take special measures that will be able to neutralize the impact of various threats in a timely manner, as well as increase the level of financial security of the state.

Keywords: financial security; threats to financial security; analysis, public debt, budget deficit, international currency reserves, GDP, indicators of financial security.

References:

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