External Debt Management in the System of Financial Security of the State

Abstract

The article is devoted to the study of the state of the state debt and the state of Ukraine’s debt policy. The relevance of this topic is that during the previous years, the public debt of Ukraine, both external and internal, was constantly growing, creating threats to the country’s debt security and financial stability. Over the last decade, the problem of the growth of Ukraine’s foreign debt continues to worsen. Attracting loan capital is caused by the need to replenish currency reserves in order to increase the resources of the country’s economic development and ensure the stability of the national currency. The purpose of the study is a theoretical generalization of the prerequisites and features of the formation of the national debt of Ukraine and the justification of the policy of management and service of the external debt, which will contribute to ensuring the financial security and economic development of the country. In accordance with the set goal, the work is supposed to solve a number of problems, the main of which are: clarifying the impact of foreign debt on the financial security of the state; clarification of the relationship between the financial and economic development of the state and the state debt; assessment of the state debt of Ukraine and the state of its financial security; development of proposals for improving the management and servicing of public debt in Ukraine. To achieve the goal, the following scientific methods were used in the scientific research: analysis and generalization - to study the current state of debt security in Ukraine; comparison and compilation - for the analysis of world and national experience in calculating the system of indicators of financial security; grouping – for clustering of relevant indicators of the impact of debt on financial security; statistical analysis – to study the dynamics of debt security indicators and calculate an integral index based on them. These methods make it possible to single out the challenges and prospects of the Ukrainian economy on the way to achieving the optimal level of the country’s foreign debt. The structure of the state debt of Ukraine and its optimal limits have been determined. An analysis of the current state and main trends of the state debt of Ukraine was carried out. In particular, the trends of its share in GDP were determined, a thorough structural analysis of the national debt of Ukraine was carried out for the period from 01.01.2013 to 01.01.2022, and an assessment of budget costs for servicing and repayment of the national debt of Ukraine was carried out. An analysis of the state and structure of the state debt of Ukraine makes it possible to identify trends in its volume growth. During the analyzed period, the size of the national debt of Ukraine changed rapidly, which is determined by general factors of economic development. The authors found that in the structure of the state debt, there is a clear tendency towards the predominance of external debt over internal debt. The main causes of the state debt are the state budget deficit and significant amounts of internal and external borrowing. Further growth of the national debt of Ukraine is very dangerous and may lead to the loss of economic independence, the withdrawal of funds from the financial market that could be used for the development of the real sector of the economy, a decrease in competitiveness on domestic and foreign markets, and a decline in the standard of living of the country’s population. But reaching the projected level threatens Ukraine with default. In order to avoid negative consequences, it is proposed to improve the mechanism of public debt management at the institutional level, to improve the legal framework, and also to increase the level of own gross domestic product by modernizing domestic enterprises.