FEATURES OF ENSURING THE STABILITY OF PUBLIC FINANCES DURING THE WAR
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Abstract
The purpose of the article is to identify, systematise and typologise the tools and macroeconomic challenges to the sustainability of public finances in the context of the current struggle for Ukraine's independence (the Russian-Ukrainian war) and the European integration orientation of the ontogenesis of the system for managing them. Methodology. The methodology is based on a multi-approach that combines empirical data on the structural and qualitative parameters of the functioning of the public finance system, econometric modelling of its parameters, and a "heat matrix" for visualising and developing practical recommendations for ensuring the sustainability of public finances during the Russian-Ukrainian war. Results. Empirical research has shown that defence spending has the greatest impact on the structure of state budget expenditure, with each increase of 1 billion UAH leading to an increase in total expenditure of 1.32 billion UAH (β₃ = 1,3178, p = 0,005). A comprehensive correlation analysis of macrofinancial indicators confirmed the high dependence of tax revenues on the macroeconomic context (r ≈ 0.99) and an inverse correlation between defence spending and the budget balance (r ≈ -0.61), which demonstrates the mechanism of deficit formation in conditions of armed conflict. Based on forecast models, it has been established that the budget deficit could be reduced from 20.4% of GDP in 2024 to 4.5% in 2027, provided that international financial support for Ukraine's sovereignty and its European integration aspirations remains united. Practical significance of the study. The developed integrated model for assessing the sustainability of public finances provides public authorities with scientifically sound recommendations on optimising the allocation of fiscal resources and attracting domestic and external sources of financing in extreme conditions marked by armed conflict. The set of macro-financial indicators and approaches to monitoring fiscal risks proposed in the study serves as a practical tool for the rapid assessment of critical changes in public finances and the timely adjustment of budgetary and tax policies, taking into account the triggers identified in sectoral documents that determine the architecture of the public finance management system. The scientific novelty of the study lies in the construction of a comprehensive model for assessing the sustainability of public finances, adapted to the extreme conditions of armed conflict, which synthesises econometric modelling with multifaceted correlation analysis. A key innovation is the establishment of the fact that fiscal sustainability depends not only on orthodox debt and deficit indicators, but also on systemic interaction, expressed through the transmission mechanism of the tax base, the volume of external financing and the structure of budget expenditures. This corresponds to the conditions of the new normal in public finance and is in line with Ukrainian academic discourse on assessing the sustainability of public finances, taking into account the needs of early post-war recovery.
How to Cite
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public finances, fiscal sustainability, State Budget of Ukraine, budget revenue and expenditure, economic stability, grants, econometric modelling, security and defence needs, tax revenues
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