BUDGETARY AND MONETARY POLICY: THEORETICAL PRINCIPLES AND PRACTICE OF COMPLEMENTARITY

Abstract

The management of public finances in view of European integration processes and economic reforms is directed in accordance with state policy. Politics covers all the areas of activity and depending on the sphere of social relations, which is the object of political influence of the state, is defined as economic, social, financial policy; within the framework of financial policy, fiscal (budgetary, tax, debt), monetary and credit, currency, customs, etc. Budgetary and monetary policies have their specific goals and objectives in the economic system and therefore represent its institutionally separated, independent components. However, in terms of the direction of the regulatory influence on the development of the economy, they are largely identical, which is why it is possible to change the state of the economy by measures of both monetary and budgetary policy. The connection between the mechanisms gives reasons for scientists to consider them as alternatives, which led to a long discussion about the advantages and disadvantages of each of them and about their place and role in the economy regulation. Currently, domestic practice indicates the adjustment of fiscal policy to those macroeconomic processes that occur spontaneously, or the implementation of those guidelines that are recommended to Ukraine from the outside. Thus, from the current interests point of view, it is difficult to justify the priority and the volume of budget expenditures for servicing the public debt (although trust in Ukraine as a responsible borrower served in moments of critical lack of resources during the russian military aggression, which made it possible to additionally attract financial resources of credit and grant nature). Encouraging non-resident investors to hryvnia government bonds on the primary market with preferential taxation (where the ultimate beneficiaries are representatives of the domestic capital) is a manifestation of private rather than national interests. Along with this, in view of the need to achieve a single target guideline, effective coordination of tools, levers of budgetary and monetary policy is important. The active phase of russian military aggression against Ukraine is a significant test, including the ability to ensure the budgetary and monetary policies complementarity. According to the Cabinet of Ministers of Ukraine forecasts, included in the project of the state budget of Ukraine for 2023, an increase in inflation (+30%), an increase in the exchange rate of the hryvnia against the US dollar (up to UAH 50/dollar by the end of the year), a decrease in the level of redistribution of GDP through the budget (up to 19.7% - the ratio of budget revenues without transfers to GDP), an increase in the level of expenditures (up to 39% of GDP) are expected, the budget deficit will reach 20% of GDP, the amount of public debt may exceed the amount of GDP [1, 2]. Under such conditions, ensuring the budget system financial stability and macroeconomic stability is an extremely difficult task. The results of the practical implementation of the coordination of measures of budgetary and monetary policy of Ukraine in view of their theoretical basis are ambiguous and need to be studied.