STATE BUDGET DEFICIT AND PUBLIC DEBT OF UKRAINE: CURRENT SITUATION AND APPROACHES TO ITS IMPROVEMENT

Abstract

The article shows that in a difficult period of transition from the administrative-planned to the market system in Ukraine formed the practice of state budget deficit and increase public debt in order to urgently address the acute socio-economic problems of society. At the present stage of development of the Ukrainian economy, the question of reducing the budget deficit and public debt has already arisen. To answer it, the study analyzes the state budget deficit and public debt in Ukraine and identifies effective sources of public debt repayment. It is substantiated that the basic direction of improving the situation should be the growth of the domestic economy. This statement is due to the fact that the size of the deficit and debt of the state are derived from the state of economic development of the country. Considerable attention is paid to the analysis of sources of covering the lack of public funds. It is noted that the main sources are external and internal borrowing, and others - funds from privatization, sale of government securities, return of deposits - are not powerful and are not permanent. The article notes that during the study period there was a significant increase in public debt. This situation is threatening, as our country's dependence on foreign creditors is growing. It is noted that in the structure of our external debt, more than half are foreign government bonds (ODP), and the market for these instruments is very sensitive to economic and political changes in the issuer's country. It is proved that domestic government borrowing has certain advantages, because there is a redistributive process that does not cause rising prices. The study notes that difficulties in forming domestic public debt through domestic government bonds (IGLBs) in Ukraine are due to low living standards and insufficient development of the securities market. It is concluded that the significant pressure of domestic public debt on the domestic economy can be reduced only by implementing measures to strengthen investment processes and development on this basis of domestic production.