FISCAL POLICY OF UKRAINE AS THE FACTOR OF THE SUSTAINABILE DEVELOPMENT OF THE TERRITORIES IN CONDITIONS OF MARTIAL LAW

Abstract

It proves that the fiscal policy in the war conditions needs economic diversification with the help of the use of existing resources optimization and the search of uninvolved ones as well. The aim of the research is to deeply analyze the theoretical-methodological bases of Ukrainian fiscal policy formulation and fulfillment in conditions of martial law and its impact on the financial system of the government. Government’s revenue (taxes) and government’s expenditure are the main instruments of fiscal policy. High uncertainty in condition of full-scale war led to the reducing of the effectiveness of market instruments of fiscal policy and made it impossible in the traditional format. It defines that instruments of fiscal policy helped to provide some measures for designing expansionary fiscal policy in conditions of martial law. Grant funds of international partners as well as non-tax revenue at the expense of voluntary transfers from citizens, enterprises, and organizations to support Ukraine have become the ultimate source of government’s revenue from the beginning of the war. The search of instruments for financing (ensuring defense capability and security of the country; social expenses, increasing the monetary support of the military, debt service expenses) has become the key of fiscal policy. It explains that negative opening balance of consolidated budget of Ukraine targeted at cyclical economy position of the country proves the sharp softening of fiscal policy. The probation of such kind of fiscal policy was due to the intense growth of the budgetary expenditures on providing defense capabilities of the country and incentives to support economy in conditions of martial law. It proves that the abrupt deficit expansion of consolidated budget is the justified countercyclical measure of fiscal policy in conditions of martial law. The softening of fiscal policy in the country has mainly become possible because of quite balanced fiscal policy of past years and considerable international support as well.