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№ 2022/1

Economy under the conditions of modern transformations

HARKAVENKO Valentyna Ivanivna1, YERSHOVA Galina Vitaliivna2

1Institute for Economics and Forecasting, NAS of Ukraine
2Institute for Economics and Forecasting, NAS of Ukraine


Economy and forecasting 2022; 1:84-101https://doi.org/10.15407/econforecast2022.01.084


The influence of the government's debt policy on the development of Ukraine's economy is analyzed. It is determined that today almost all indicators of debt stability in Ukraine exceed the critical limit, beyond which the state loses the ability to solve debt problems on its own. Thus, during 2014–2021, the domestic public and state-guaranteed debt of Ukraine increased in hryvnia equivalent by 3.9 times and as of the end of 2021 amounted to UAH 1,111.6 billion. The increase in debt was primarily due to direct public debt, which increased 4.1 times during the analyzed period.
It is concluded that the scale of government borrowing in Ukraine makes it a threat to the economy, because without a change in the current government debt policy, the risk of the government's inability to meet its obligations to repay and service the debt will increase. Emphasis is placed on rethinking the country's economic policy in the direction of limiting the country's debt dependence, improving the structure of balance of payments and foreign trade balances, a balanced approach to the liberalization of relations in the foreign economic sphere and attracting foreign investment.
A detailed analysis of trends in the issuance of domestic and external government bonds, as well as attracting debt financing from international financial organizations. The study of trends, and most importantly the structure of domestic government bonds, suggests that their growth is due to the need to finance not only the state budget deficit, but also the shortcomings and miscalculations of monetary and debt policy, as well as protectionist interests of individual businesses.
Emphasis is placed on the fact that a significant share of non-residents' funds in domestic government bonds increases the country's exchange rate and financial vulnerability and is a factor that allows non-residents to influence the foreign exchange market and, accordingly, the national currency and international reserves of Ukraine

Keywords:government debt policy, state budget deficit, public debt, debt sustainability, domestic government bonds, external government bonds

JEL: H63

Article in English (pp. 84 - 101) DownloadDownloads :5