BUDGETARY PROJECTION IN THE SYSTEM OF FINANCIAL AND ECONOMIC REGULATION OF SOCIAL PROCESSES

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

Published: Mar 16, 2020

Abstract

The purpose of the article is to reveal the role of budgetary projection in the system of financial and economic regulation of social processes within the framework of improving the efficiency of fiscal policy intended to macroeconomic stability maintenance in both countries with transformational and advanced economies. The comparative and factorial methods allowed to developthe features of the institutional environment of the budgetary progection methodology, to identify approaches for its improvement. Methodology. Substantiation of the role of budget forecasting in the system of financial and economic regulation of social processes, determination of provisions for improving its methodology is based on generalized and systematic approaches that are applied in both developed and transformational economies. An analysis of the stages of the process and the budgetary projection methods evaluation, that are used in different countries, have been carried out. Results showed that the efficient budgetary projection methodology is the basis for sound fiscal policy. The development of realistic budgetary projections facilitates justified management decisions aimed at ensuring the country financial firmness. Devia-tions from budget revenues from the projected indicators do not make it possible to achieve certain fiscal policy outcomes and, accordingly, cause a budget cut. In order to develop realistic budgetary projections, a welldesigned and coherent database is needed for all time series, necessary to analyze and project budget revenues. Time series of key determinants affecting the budget revenues level should be available at different frequencies (monthly, quarterly, annually). Where data reflecting similar economic processes by different revenue sources are available, any differences between them shall be determined by reference to their coverage and methodology. Practical implications. Budgetary projections are the basis for the formation of effective fiscal policy and the benchmark of the reproduction process. Adequate level of justification for budget projection will help to provide a dynamic balance of budgetary indicators and the budgetary system stability. Institutional changes to the budgetary projection methodology should be made on the basis of taking into account the dynamic interrelation of budgetary and macroeconomic indicators. The remarkable task here is the development of an economic and mathematical model based on the assessment of the national economy capabilities by reference to the assessment of macroeconomic proportions and the corresponding social and economic conditions of social production. Value/ originality. Developing the budgetary projection approaches in the context of improvement of the fiscal policy efficiency is an important precondition for ensuring macroeconomic stability. In order to increase the budget projection justifiability, it is advisable to make institutional changes to its methodology. Based on the methioned above, the article reveals the essence and role of the budgetary projection in the system of financial and economic regulation of social processes in the context of improving the fiscal policy effectiveness aimed at macroeconomic stability maintenance; approaches to improving the budgetary projection methodology have been identified, and it has been determined that the soundness and feasibility of budgetary projection are the basis for effective fiscal policy. The predictability of budgetary criteria, budgetary architectonics contribute to improving the efficiency of transformations in the public finance system.

How to Cite

Chugunov, I., & Makohon, V. (2020). BUDGETARY PROJECTION IN THE SYSTEM OF FINANCIAL AND ECONOMIC REGULATION OF SOCIAL PROCESSES. Baltic Journal of Economic Studies, 6(1), 130-135. https://doi.org/10.30525/2256-0742/2020-6-1-130-135
Article views: 1108 | PDF Downloads: 681

##plugins.themes.bootstrap3.article.details##

Keywords

budget, budgetary projection, fiscal policy, budgetary system, budgetary architectonics

References

Heyets, V. M. (2008). Modeli i metody socialno-economichnoho prohnozuvannia [Models and methods of socioeconomic planning]. Kharkiv: PH “INZHEK”, 396 p.

Surmin, Yu. P., Bakumenko, V. D., Mihnenko, A. M. and etc. (2010). Entsyklopedychnyi slovnyk z derzhavnoho upravlinnia [Encyclopedic Dictionary of Public Administration]. Kyiv: NADU, 820 p.

Pro derzhavne prohnozuvannia ta rozroblennia prohram ekonomichnoho i sotsialnoho rozvytku Ukrainy [On State Forecasting and Development of Programs of Economic and Social Development of Ukraine]. Law of Ukraine dated 03.03.2000 No. 1602-III.

O gosudarstvennom prognozirovanii i programmah sotsyalno-ekonomicheskogo razvitiia Respubliki Belarus [On State Forecasting and Programs of Socio-Economic Development of the Republic of Belarus]. The Law of the Republic of Belarus dated May 5, 1998 No. 157-3.

Klets, L. (2007). Biudzhetnyi menedzhment [Budget Management]. Center for Educational Literature, 640 p.

Gryaznova, A. G. (ed.) (2007). Finansovo-creditnyi encyclopedicheskiy slovar [Financial and Credit Encyclopedic Dictionary]. Moscow: Finance and Statistics, 1165 p.

Boukari, M., & José Veiga, F. (2018). Disentangling political and institutional determinants of budget forecast errors: A comparative approach Journal of Comparative Economics, Volume 46, Issue 4, pp. 1030–1045.

Pro vnutrishnie i zovnishnie stanovyshche Ukrainy na 2017 rik [On Internal and External Situation of Ukraine in 2017]. Message from the President of Ukraine to the Verkhovna Rada of Ukraine. Retrieved from https://zakon.rada.gov.ua

Nicolae, P. V. (2013). The Financial and Budgetary Discipline in Romania – The Arrears of Local Public Authorities. Annals – Economy Series, vol. 2, pp. 221–226.

Council Directive 2011/85 / EU of 8 November 2011 on requirements for budgetary frameworks of the Member States (2011). Official Journal. L 306. 41–47.

Manual on Fiscal Transparency (2007). International Monetary Fund. Retrieved from: https://www.imf.org/external/np/pp/2007/eng/051507m.pdf