Investigation of the interaction of fiscal and monetary policies in the conditions of economic growth in Ukraine

Abstract

The object of research is the processes of fiscal and monetary regulation, as well as the results of their impact on the economy of Ukraine. One of the most problematic areas is the unbalanced interaction of fiscal and monetary policy, which negatively affects the efficiency of the allocation of financial resources and increases the risks of government debt. In the course of the research, methods of systemic, theoretical generalization, analysis, comparative comparison and graphical presentation of results are used, which allow the author to prove the absence of a positive synergetic effect of monetary and fiscal policy. This is determined by the unsuccessful attempts of the National Bank of Ukraine to apply inflation targeting and the critical state of Ukraine's public debt. The presence of serious problems in the financial system of Ukraine is characterized by a constant trend in the growth of public debt in 2016–2017. State and government-guaranteed debt of Ukraine in September 2017 amounted to 82 % of GDP, which accounts for 5 % of GDP. This is due to an increase in the Government's expenses for servicing its own debt obligations through domestic borrowing through issuance of domestic government loan bonds in the amount of 15.27 billion UAH for the period 2014 – 9 months of 2017. The peculiarity of the policy of public debt management in Ukraine is determined by the use of the resources of the banking system to lend to the government. This situation causes the processes of escalating quasi-fiscal operations leading to quasi-monetization, distortion of the values of economic indicators, the predicted level and effectiveness of monetary instruments of inflation targeting. Based on empirical generalizations, directions for implementing coordinated interaction of fiscal and monetary instruments are identified. This is achieved through economic activation of the stimulating role of fiscal policy, stimulation of economic growth on the part of demand, and an increase in the efficiency of using external borrowed funds. The implementation of a system of measures in the spheres of monetary circulation and credit will help to stimulate inflation, employment and equalization of the balance of payments. Advantages of the operational management of the debt of all sectors of the economy are ensuring the lack of a budget, as a prerequisite for Ukraine's stable economic development.