Abstract
Today government budget scarcity is a relevant problem both for advanced economies and developing countries. Investigation of problems of budget deficit and public debt has had a long history and nowadays it is covered both in modern Ukrainian and foreign scientific literature.The aim of the paper is to differ causes and factors of genesis of budget deficit, make statistical analysis of fiscal deficits in Ukraine and Hungary and develop recommendations for budget policy. Research methods are dialectical method, historical method, system approach, analysis and synthesis, comparison method, model building, statistical analysis.Detailed analysis of factors and reasons for formation of general government budget deficit has been given in the paper. Direct causes (such as periods of economic crises, fiscal stimulation, increase in public debt) and concomitant negative factors of deepening budget deficit (such as unfavorable structure of public debt, imbalances of regional development, disadvantages of organization of budget system, disproportionate growth of social expenditures, shadow economy) have been differentiated. A retrospective investigation of budget deficit in Ukraine and Hungary has been carried out. The study is based on indices of budget deficit (deficit coefficient, elasticity of deficit, growth rate of fiscal deficit etc.). Conclusions have been drawn about the depth of this problem in Ukraine and Hungary. The possibilities of implementation of Hungarian experience into Ukrainian economy have been substantiated. The concepts of government budget balancing have been revealed. The system of measures for public policy of budget deficit reduction has been developed, namely: use of acceptable concept of budget balancing, ensuring stable economic growth, ensuring relative decrease in government spending, improving its efficiency, easing impact of related negative factors.
Highlights
Modern national economies experience cyclical nature of their economic development
Measures for elimination of effects of other concomitant factors: a) limiting the influence of political cycles on budget policy; differentiating political activities from stable and consistent public administration; ensuring continuity of fiscal policy; b) easing of regional disparities in economic development: ensuring financial independence, self-financing of regions, which may reduce a share of intergovernmental transfers; c) improving financial discipline and setting clear fiscal rules, both in the private sector and in the general government sector; monitoring of quasifiscal operations and reducing their negative impact on financial system; d) upgrade of functioning of budget system, use of cautious scenarios in budget planning, improving quality of macroeconomic calculations and forecasting
Research in the area of budget deficit is an urgent task for scientists and policymakers of the countries with different levels of social and economic development
Summary
Modern national economies experience cyclical nature of their economic development. Financial and economic crises follow upswings and vice versa. 1. Ensuring relative decrease in government spending and improving its efficiency should include the following measures: a) targeted use of budget funds; placement of public investment funds in the most promising knowledge-based industries; reducing impact of corruption factors in the process of using budget funds; b) moderation of cyclical nature of economic development in terms of capitalist market system: lowering the amplitude of cyclical fluctuations, reducing the recession phase duration in order to prevent a sharp increase in government spending and a simultaneous fall in tax revenues during a crisis stage; c) provision of debt sustainability maintenance: striving to reduce absolute value of public debt and its ratio to GDP; improving its structure with a reduction of proportion of external debt and debt in foreign currency; appropriate decrease in reducing debt servicing payments as a part of government spending; d) anti-poverty policy: combating poverty, upgrading living standards and quality of life of population will lead to a reduction in the number of people included into socially and economically disadvantaged groups (for example, the phenomenon of "working poor") and a reduction of social transfers share. Measures for elimination of effects of other concomitant factors: a) limiting the influence of political cycles on budget policy; differentiating political activities from stable and consistent public administration; ensuring continuity of fiscal policy; b) easing of regional disparities in economic development: ensuring financial independence, self-financing of regions, which may reduce a share of intergovernmental transfers; c) improving financial discipline and setting clear fiscal rules, both in the private sector and in the general government sector; monitoring of quasifiscal operations and reducing their negative impact on financial system; d) upgrade of functioning of budget system, use of cautious scenarios in budget planning, improving quality of macroeconomic calculations and forecasting
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