№ 4/2016

Fìnansi Ukr. 2016 (4): 27–

PUBLIC FINANCE MANAGEMENT

BOHDAN Ivan ¹, YARA Tetiana ², KONOVALENKO Dmytro ³

¹National Bank of Ukraine
OrcID ID : https://orcid.org/0000-0002-1752-0198
²SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-8242-1479
³SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-6314-3525

DIAGNOSTICS OF GENERAL GOVERNMENT POSITION IN UKRAINE

The article deals with the practical aspects of applying modern tools for the diagnostics of the general government (GG) sector position in accordance with the standards of fiscal statistics of the IMF. The authors identify the issues of public finance in Ukraine and outline the primary actions of the fiscal policy for adjusting the revealed fiscal imbalances. Based on IMF database indicators, reports of the State Treasury of Ukraine, statements of the Pension Fund of Ukraine, the authors calculated and interpreted the indicators of current transactions, operating balance, net lending/borrowing, final balance and other GG fiscal indicators. The elasticity of the real growth rates of general government revenues relative to the growth rates of real GDP is estimated. To track the implications of the economic cycle on the public finance position, the authors estimated the potential GDP for Ukraine and GDP gap relative to actual GDP, cyclical adjustments of fiscal indicators and the cyclically adjusted primary operating balance for GG of Ukraine over 2002-2015. The study covers a sector GDP structure by the elements of primary and disposable income of different sectors. It is found that, for the last five years, the share of GG revenues in the economy has been gradually declining whereas the share of revenues remained unchanged, which leads to permanent fiscal imbalances and increasing government financing needs. The authors explain the key drivers of excessive and permanent fiscal deficit, as well as its impact on the net asset value of GG. The article highlights numerous threats associated with government purchases of low-quality financial assets, using the proceeds from additional issuances of domestic government bonds. The authors compellingly argue that there is an urgent need for the large-scale consolidation of public finance, structural reforms in the fiscal sector and improvement of its transparency through the introduction of modern international accounting and reporting standards.

Keywords:general government sector, financial programming, public finance, deficit.

JEL: E62, E69.

BOHDAN I. . DIAGNOSTICS OF GENERAL GOVERNMENT POSITION IN UKRAINE / I. . BOHDAN, T. Yara, D. Konovalenko // Фінанси України. - 2016. - № 4. - C. 27-.

Article original in Ukrainian (pp. 27 - 49)

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