Budgetary policy of Ukraine in time of challenges and its impact on financial security

Abstract

Ukraine has recently experienced a significant economic downturn as a result of the COVID-19 pandemic and the war caused by a large-scale military aggression of the Russian Federation. In conditions of the constant fluctuations of the national economy, the stimulating effect of the budgetary policy aimed at minimizing the consequences of such fluctuations and guaranteeing a sufficient level of financial security of the state becomes especially important. The aim of the study is to deepen the theoretical and methodological foundations of the creation and implementation of budgetary policy in Ukraine, evaluation of its impact on the financial security in time of challenges. The study uses methods of comparative analysis, grouping in the process of evaluating the current state of budgetary policy indicators, methods of normalization and standardization of data, modelling, and graphical analysis of data for normalizing the financial security indicators and determining the dynamics of financial security components. The materials and reports containing statistical data from the Ministry of Finance of Ukraine and the State Statistics Service of Ukraine served as the basis of the study. We found out that the components of the financial security of the state in the face of the challenges posed by martial law and the pandemic do not take into account the impact of budgetary policy. We substantiated the thesis that the creation of Ukraine's budgetary policy under martial law requires adjustments to the financial security assessment system. The most statistically significant and reliable models of interrelation were selected for further use in multifactor modelling and forecasting the financial security of the state (on the basis of ranking the linear, polynominal, exponential, logarithmic and power dependencies within one-factor equations). It was experimentally proved that out of 122 statistically significant indicators, budgetary policy indicators such as the coefficient of financing the national functions, the coefficient of public debt service and redemption, and the coefficient of the proportionality of financing the national security agencies had the greatest impact on the financial security of Ukraine. We also substantiated the scientific provisions behind the modelling of the level of financial security of Ukraine taking into account the impact of budgetary policy in the period of challenges. In the process of modelling, the indicators of budgetary policy were identified, while regression analysis revealed the factors influencing the budgetary policy.