Capital Spending Research Articles

Petroleum++: Uptick in Capital Expenditures Highlights the Continued Need for Petroleum Engineering Skills

Some oil and gas companies, the major source of employment for SPE members, revealed their budgets for 2023 and the following years. A look at where the companies plan to direct their spending sheds light on the areas of expected job availability and needed competencies. The numbers show companies’ major allocation of funds for oil and gas exploration and production and concerted efforts to reduce their carbon footprint by reducing emissions resulting from their current operations (whether it is under scope 1, 2, or 3) and increasing efforts to develop new sources of energy. Oil and gas companies’ plans reflect a strategy that may be described as Petroleum ++. The Federal Reserve Bank of Dallas conducts a quarterly energy survey, and in its most recent one (released 29 December), it asked respondents about expectations for capital spending in 2023 vs. 2022. Most reporting companies indicated they plan to increase their capex spending within a range of 8 to 25%. Some major international companies announced additions to their capital budgets. While some reported their plans for 2023, others reported 5-year plans. I wish all were reported the same way with specific numbers for various activities so that we engineers can input all values in a table and reach quantitative conclusions, but this is not the case, and we must review what is being reported and reach a generalized understanding about future directions. For example, Chevron reported about $14 billion capex in 2023 with 82% going to upstream oil and gas projects, 14% towards the effort to lower its carbon footprint, and 7% toward new energy developments. ExxonMobil reported a capex budget of between $20–25 billion annually through 2027 with 15% directed to efforts to lower emissions. TotalEnergies plans to increase its annual budget by about 14% in the 2023–2025 period to about $14 billion per year and appears to be targeting about $6 billion for new oil and gas assets and $4 billion for new energy. Saudi Aramco approved $296 billion for 2023 and has created a $1.5-billion sustainability fund to invest in technology that can support a stable and inclusive energy transition. Petrobras will increase investment during the 2023–2027 period to $78 billion with 83% earmarked for traditional exploration and production activities, 6% to reduce carbon emissions, and about 1% for the decarbonization fund. The directions from the announced spending plans of oil and gas companies indicate that more than about 80% of their budgets are directed toward traditional oil and gas exploration and production and concerted efforts to reduce emissions and carbon footprint, and measurable sustainable investment in new energy. This clearly shows SPE members, employers, and educational institutions the needed competencies and technical skills that we all need to continue our work and provide the world with the energy it needs. As mentioned earlier this may be summarized by Petroleum ++. It is also reasonable to expect that with the increase in budgets of oil and gas companies, there will be an uptick in the employment of petroleum professionals. A modest increase that we just witnessed in the number of SPE members in 2022 for the first time in a few years may be a good indication.

Time-varying impact of fiscal shocks over GDP growth in Peru: An empirical application using hybrid TVP-VAR-SV models

This paper estimates hybrid TVP-VAR-SV models suggested by Chan and Eisenstat (2018a) to identify and quantify the impact of fiscal shocks on GDP growth in Peru between 1995Q1–2018Q2. According to Bayesian criteria, the best models exhibit time-varying dynamics, but not necessarily in all parameters. Considering this result, our findings suggest that: (i) fiscal shocks are significant in the whole sample according to impulse response functions, forecast error variance decomposition and historical decomposition of GDP growth; (ii) tax revenue shocks are the least important and their impact is model dependent; (iii) expenditure shocks are relevant drivers of GDP growth; and (iv) expenditure multipliers, mainly for capital spending, have been growing over the last 20 years. We recommend constant revision of estimated fiscal multipliers and suggest that, in following years, fiscal policy in Peru should be mostly driven by capital expenditure.

The Impact of Fiscal Policy Tools on Unemployment Rates in Jordan: Autoregressive Distributed Lag Approach

Objectives: The main objective of this study is to investigate the impact of fiscal policy tools on unemployment rates in Jordan during the period 1986-2019.
 Methods: The study estimated two models; the first consists of tax revenues and aggregate government expenditure as independent variables, and the second consists of tax revenues in addition to capital and current government expenditures as explanatory variables.
 Results: The study variables are integrated at different levels and cointegrated in both models as indicated by Augmented Dickey-Fuller Unit Root Test and Bounds Cointegration test. Therefore, the study used the Autoregressive Distributed Lag approach for estimation. The results for the first model clarified that the increase in aggregate government expenditure causes unemployment rates to decline in the short and long run. On the other hand, the results for the second model showed that the increase in tax revenues increases unemployment rates in the short and long run. Moreover, current government spending has significant negative short and long-run effects on unemployment rates, while capital spending has only a significant negative short-run impact.
 Conclusions: Based on these outcomes, the study has introduced some recommendations with regard to increasing the effectiveness of fiscal policy instruments in reducing unemployment rates in Jordan.

Is tourism growth a power of environmental‘de -degradation’? An empirical analysis for Eurozone economic space

The present study aims to investigate potential causality relationships between environmental quality, energy efficiency, and economy when testing the validity of the Environmental Kuznets Curve (EKC) hypothesis. To this effort, panel data analysis concerning Eurozone member states is put into the process for the period 1996–2019. We conceptualize environmental degradation in terms of greenhouse gas emissions, energy efficiency in terms of energy consumption, and the economy concerning a nation’s Gross Domestic Product (GDP). We include additional tourism indicators in terms of the direct contribution of tourism to GDP and tourism key market segments when testing the hypothesis of EKC. Scarcely in literature, we find empirical research that investigates the heterogeneous nature of tourism in the context of business tourism spending and leisure tourism spending, and the environment. This is an essential question, which seeks ways to optimize human and technical resources and processes, sectoral and organizational, to establish sustainability within the economy. This suggests that a potential gap in the literature might exist. We process contemporary panel regression tests that consider possible structural breaks and cross-section dependence phenomena across panel data. Empirical findings confirm the EKC hypothesis whereas business tourism spending, capital investment spending, and internal travel and tourism consumption negatively impact GHG emissions. Furthermore, Granger non-causality tests suggest that all variables Granger cause GHG emissions. Practical implications call for establishing sustainable energy consumption and tourism spending patterns in the long run.

Estimation of Multiflier Effect of Public Spending on Economic Growth under Multiple Regimes Regime

The paper estimates the multiplier effect of public spending (total government spending) on economic growth (RGDP) from 44 years long time-series database of macro-economic variables from 1974-75 to 2018-19 (Panchayat Regime (1975-1990), Democracy I: Ceremonial Monarch (1991-2005) and Democracy II: Federal (2006-2019)) through structure vector auto-regressive (SVAR) model with tests. The paper provides the above three political regimes based on relationships between public spending and economic growth and the multiplier of public spending on economic growth. As a result, in the three different regimes, their nature, behavior, and dynamics are stationary. Except for real regular spending (RRS) in Democracy I: Ceremonial Monarch (1991-2005) and real capital spending (RCS) in Democracy II: Federal (2006-2019), all coefficient values of SVAR estimate shows a significantly positive relationship between the government spending and economic growth. It indicates a positive multiplier effect of public spending; recurrent spending and capital spending are positive to economic growth, except for GRRE in Democracy I: Ceremonial Monarch (1991-2005) and RCS in Democracy II: Federal (2006-2019). Likewise, in the different political regimes, higher multiplier of total public spending, regular public spending and capital public spending in the Panchayat Regime (1975-1990) are better than successive democratic regimes so-called the people’s centric political regimes: Democracy I: Ceremonial Monarch (1991-2005) and Democracy II: Federal (2006-2019). Besides, except for the Panchayat Regime (1975-1990), the multiplier value of public spending; recurrent spending, and capital spending are lower in Democracy I: Ceremonial Monarch (1991-2005) and then Democracy II: Federal (2006-2019). It indicates the low efficiency of the government spending and budgetary system. Therefore, the government should improve the efficiency of public spending, the ratio of the capital spending, and private investment for improving the higher multiplier variable in long run.

THE EFFECT OF BALANCED FUNDS AND BUDGET RESCUE CALCULATIONS ON THE HUMAN DEVELOPMENT INDEX WITH CAPITAL EXPENDITURE AS AN INTERVENING VARIABLE IN DISTRICT/CITIES IN WEST JAVA PROVINCE 2019-2021

The study aims to test the influence, balance funds and SiLPA on the human development index with capital expenditure as an intervening variable. The study used saturated sampling, with a total of 81 samples. The data used are the General Allocation Fund, Special Allocation Funds, Fund for Results, Capital Shops (BM), and Human Development Index derived from the APBD realisation report and the District/City Development Index Table in the West Java Province in 2019-2021. This study uses double linear regression analysis and path analysis. The results of this research are balancing funds and the remainder more calculations of the budget influence on capital expenditures. balance fund and the rest more calculation of budget influences on human development index. capital expenditure is not influenced on the index of human development. funds of balance influence indirectly on the development index of humans through capital spending. Remaining more budget calculations do not indirectly affect the human development index through capital spending. The size of R Square influence of Balance Fund and SiLPA on Capital Purchases is 52.6%. The influence of Balance Funds, SiLPA, and Capital Purchases on the Human Development Index was 41.9%.

Linkage Between Income and Government Expenditure at Indian Sub-Nationals: A Second-Generation Panel Cointegration Techniques

This article examined whether the Wagner’s law that represents the long-run relationship between income and public expenditure holds at the subnational level in India. It also examines whether the Wagner's law is revenue expenditure specific or capital expenditure specific in the context of Indian sub-nationals. The paper covers 21 Indian States and a time period of 40 years, from 1980-81 to 2019-20. In this study we have assessed six pairs of relationships among state-level income, public expenditures, revenue expenditure, capital outlay, public expenditure on economic services, public expenditure on social services, and expenditure on the developmental sector. The validity of the law was examined for nine different panels of states broadly under income categories and geographical regions. Unlike first-generation panel techniques, which fail to account for the aspects of cross-sectional independence and heterogeneity, the present study tests the validity of the Wagner’s law using the second-generation panel unit root method and cointegration approach. The analysis adopted Panel Dynamic Ordinary Least Square to test the evidence of Wagner’s law hypothesis. The findings reveal that Indian states are heterogeneous in terms of public expenditure, and there exists cross-sectional dependence. There also exists a long-run cointegrating relation between state-level income and state-level public expenditure. For the full sample, while this study finds holding Wagner’s law, there is a mixed validity of the law in different panels across income categories and regions. In addition, it is observed that the validity of Wagner’s law in the Indian Subnational context is mainly driven by the high-income major states, and it is more capital outlay centric. To conclude, these responsive affiliations comprehend the effectiveness of public expenditure as a fiscal policy instrument in stimulating economic growth and the contribution of economic growth in the budget exercise at the subnational level. Therefore, subnational governments need to be more strategic to ensure growth momentum as the public expenditure indirectly and directly causes the living standard and welfare of the people in the economy. It must be acknowledged that India adopted fiscal rules in 2005, which may limit the procyclical fiscal policy during the swings in the business cycle, and thus have implications for budget exercises at the sub-national level.

THE UNDERLYING CONCERNS DEFYING ORGANIC FARMERS IN THE PHILIPPINES

The shifting trend in the consumption of health and environmentally-friendly products in the market prompted the government and selected farming entities to shift to organic agriculture from conventional farming methods. Hence, the Philippine government conducted programs motivating the local farmers to shift to organic farming, given its potential in the market. Moreover, this study explores the underlying challenges defying the farmers in adopting organic farming and the action taken to counter the issues. The investigation adopted the case study research design, using the validated researcher-made interview guide in data gathering. Using the purposive sampling technique, ten (10) farmers from the selected accredited organic farms in Bohol and Negros Occidental willingly and voluntarily participated in the one-one-interview with the researchers and field investigators. For data analysis, thematic analysis was used. The themes developed from the challenges experienced by the farmers in adopting organic farming in the aspect of production and marketing are Nature’s Devastating Effect to the Crops, Pests, and Insects: Farmers Worst Enemies, Competition in the Market Share of Organic Produce Versus the Non-Organic Products, Ensuring the Health of the Soil, Long Period of Working and Waiting, Cyclical Nature of Farming Challenges. So, to remedy these problems, they realized that Challenges in Organic Farming are Inevitable and needed to Widened their Learning Horizon Through Trainings and Seminars. Further, the challenges they experience in their quest of adopting organic farming in the provision of supporting infrastructure are: Absence of Supporting Infrastructure Needs Self Help, Selective Provision of Government Assistance, No Support Since Time Immemorial. To survive, the actions taken were: Farmers’ Self Reliance Leads to Survival and Financiers Provide Capital to the Farmers. The organic farmer in the Cebu and Negros Occidental, Philippines, has been confronted with various challenging situations that affected their sustainability amid competing with the producers of vegetables, fruits, and livestock using conventional farming methods. The most significant problem the organic farmers face is the reality of the Philippines’ vulnerability to strong typhoons and other calamities that would destroy the crops. Also, because organic farming does not apply commercial chemicals, there were instances that insects and pests would destroy their plants. Also, organic agriculture requires more time to restore the health of the soil that was destroyed after long years of applying harmful pesticides and fertilizers. Hence, the yield that would compensate the farmers’ efforts and capital outlay cannot be recovered immediately after each cropping season.

Time Series Analysis of Philippine Agricultural Rice Productivity using Cobb-Douglas Production Function from 2017 To 2022

One of the main agricultural industries in the Philippines, particularly in Central Luzon, has been rice production. This study investigated the influences and determinants on national rice production. Labor, capital, credit to agriculture, spending, irrigated areas, land, and fertilizer are the relevant factors. The Cobb-Douglas Production Function was used in the study. The relationship between production output and production inputs (factors) is modeled by the Cobb-Douglas Production Function. It is used to calculate ratios of inputs to one another for efficient production and to estimate the technological change in production methods. It measured the elasticity, marginal rate of contribution, and marginal returns of capital, labor, fertilizer, irrigation, production loan, farm area, and government spending to the total agricultural rice productivity of the Philippines. This paper also analyzed the production in terms of its input and output and estimated the relationship between each input and output. The results of this study showed that capital, expenditure, and land do not significantly affect the volumes of production of rice. While labor, credit to agriculture, irrigated areas, and fertilizer significantly affect the volume of production of rice.

Natural resources: Cost of capital and discounting – Risk and uncertainty

Notable contention remains around what discount rate should be used in the determination of the net present value (NPV) of a mining operation's discounted cash flows (DCF). It is typically deemed simpler to apply a single “corporate discount rate” that satisfies the targeted project's return associated with the investment capital outlay and some unquantified element of risk. This targeted return will ideally incorporate the actual cost of capital, being the weighted average cost of capital (WACC), incorporating the capital asset pricing model (CAPM) for the equity component and the cost of debt (the inter-bank lending rate with an additional lending margin). In addition, it will also incorporate some gut-feel or indeterminate additional return factor, to account for risk, to appease the project owners and its associated shareholders. This additional project risk being captured in a discount rate is contentious, as it generally is not quantified. In addition, while there may be some argument to justify why a single, all-encompassing discount rate should be used, notably for a short-life operation, can a single discount rate applied over the life of an operating asset actually be justified? Can a single rate be equally justified for medium and long-term operations as it is for short-life operations? Importantly and accepting that the WACC and hence the discount rate vary over time, how does the risk and the uncertainty associated with a mining project get factored into the valuation, and should these factors remain static, or should they be considered separately and also be varied over on operation's life?

An Analysis of the Syrian Economy in the Era of Military Conflict, 2011–2020: The Perspective of Government and Economics

Moving into the twelfth year of conflict in Syria, the current profile indicates the violence and displacement that unfolded in 2011 have no parallels in recent history. Among the many consequences, physical capital destruction has been the most dramatic- the economic toll of war has been estimated to be about US$1.2 trillion, according to official data. This paper takes stock of the conflict's impact on domestic capital in Syria. It also contributes to the empirical literature on the effect of government capital spending on private capital during 1970–2011, using Vector Error Model (VECM) model. The key findings are: (1) the economy facing extreme limitations in raising the investment rate- as the total investment share of GDP (in real term) has dropped from 20% in 2010 to less than 7% in 2020; (2) the public investment appears to have a significant role- as it influences the economic growth in Syria directly and indirectly through private investment (in which crowding- in effect found to be significant). Further, we argue that political and institutional factors will determine the shape and scope of attracting foreign capital and enhancing local business during the reconstruction phase.

REAL WAGES, INFLATION AND UNEMPLOYMENT NEXUS, IMPLICATION ON WELFARE IN SUB SAHARAN AFRICA

This study examines the welfare implication of the real wages, inflation and unemployment nexus, in sub-Saharan Africa countries from 2001 to 2020. The goal of this study is to analyze the role of wage rate in the impact of inflation and unemployment on household welfare in SSA. The study adopted Equal Satisfaction Capacity theory by Pigou as the theoretical framework, while the Panel GMM was employed in the estimation of the variables. The results showed that wage rate, population, and exchange rate have a positive and substantial relationship with household consumption and hence welfare, but inflation, unemployment, and government capital spending had a negative but significant relationship. Furthermore, government final consumption spending have a negative and significant relationship. The study made the following recommendation; the effective employment of macroeconomic policy tools in the control of inflation, increase in employment rate through a joint public private partnership in the creation of employment, full encouragement of entrepreneurial activities as well

Local Government Investments and the Safety of an Ecosystem: Mathematical Evidence from a Developing Nation

Local governments are the motors that drive the lives of their citizens. There is no human individual who does not live under a local government, regardless of where they are situated. This is why every local authority’s environment requires a wide range of investments to make it safe and clean. In this research, we assess the expenditure arrangements of Nigerian local governments to guarantee environmental safety. A green and healthy environment is the ultimate goal of all nations throughout the world; thus, local governments are also working to reduce CO2 pollution in their communities. Nigeria has 774 local governments, and the bulk of these areas have significant pollution densities, owing to CO2 emissions from crude oil refining for both commercial and domestic use. The Niger Delta regions, where commercial quantities of crude are tapped, are the most affected by this predicament. The two techniques of spending (recurrent and capital) in local government are examined in this paper for the period from 1993 to 2020 using a multiple regression method to determine their influence on CO2 emissions reduction. The results reveal that the combination of the two methods reduce the effect of CO2 emissions, but capital spending has a greater positive benefit than recurrent spending. Examination of this link reveals that there is a very weak association between CO2 emissions and the two types of local government expenditure. The obtained results suggest that local administrations should deploy necessary environmental statutes, fines, and penalties using security officers for enforcement in order to put a halt to illegal crude oil refining and pollution.

The Influence of Green Building Application on High-Rise Building Life Cycle Cost and Valuation in Indonesia

The building sector has slowly but constantly had the largest contribution to global carbon emissions. Thus, business in the building sector has a responsibility to contribute to reducing carbon emissions. One of the ways of doing this has been by developing the concept of a green building, which is one of the solutions for sustainable development. However, the main obstacle for the property developer is a misconception that capital cost spending is more important than the life cycle cost of the building. The majority of property owners and developers are more concerned about the initial cost without taking into consideration that the initial cost is closely related to the operational cost of buildings, especially high-rise buildings. From this phenomenon, there are research opportunities that aim to determine how the concept of green influences the financial decisions of developers in Indonesia that are applied to high-rise buildings. The method used in this research is inferential analysis to determine how the influence of the application of green building factors into the valuation of a building. The valuation is based on one of three methods in a building’s valuation, which is the cost approach. Then, a comparison between the building’s valuation using green and non-green is conducted in terms of the cost analysis and sensitivity. The result of the analysis is known that according to the developer practitioners in Indonesia with the green building concept, the increase in construction costs is not always accompanied by a decrease in operating and maintenance costs, as well as an increase in property values. These findings can have implications for achieving expectations, that is increasing property values through the use of the green building concept by reducing the operational and maintenance costs.

Experimental and numerical study on the performance and mechanism of a vortex-broken electrocyclone

As the synthesis unit of a gas cyclone and electrostatic precipitator, electrocyclone has advantages in particle collection efficiency, capital outlay, and space occupation. This paper proposes a better combination of the gas cyclone and electric field based on the self-designed vortex-broken wing. The performances of the vortex-broken electrocyclone with different inlet velocities and working voltages were investigated by both experiments and numerical simulations. The flow field and electric field in the electrocyclone were obtained by large eddy simulation and solving the potential equation, respectively. The particles were modeled by the Lagrangian particle tracking model and the dynamic behavior of a representative particle was analyzed. The experimental results show that the vortex-broken electrocyclone can reduce the pressure drop and improve the collection efficiency simultaneously. However, the reduction in pressure drop is obvious at high inlet velocity, while the increment in collection efficiency is just the opposite. On the one hand, the simulated flow field reveals that the mechanism for the reduction in pressure drop is that the vortex-broken wing breaks up the inner vortex core, thereby yielding a static pressure recovery. On the other hand, the electric intensity and velocity have opposite directions in the key flow regions, thus affecting the force balance and changing particle trajectories. Further analysis of particle dynamics demonstrates that although the electric field force is far less than the drag force, the particle trajectory can be significantly changed over time. These findings can provide guidance for optimizing the technologies that incorporate electric fields and gas cyclones.

Analisis Kinerja Keuangan Daerah Serta Pengaruhnya terhadap Belanja Modal Kabupaten Batang Hari

This research entitled "Analysis local financial performance Its Influence To Capital Expenditure Of Regency Of Batang Hari ". The purpose of the study is 1). To know and DOF, RKD And RKKD of the districts of Batang Hari region; 2). To know and analyze the influence of DOF, RKD And RKKD on capital expenditure The districts of Batang Hari. This research uses descriptive quantitative analysis method. Descriptive analysis to analyze local financial capacity and quantitative analysis to analyze the influence of local financial ability on capital expenditure. The result of analysis shows that the financial capacity of Batang Hari Regency is seen from the degree of fiscal autonomy and the ratio of regional financial independence is categorized very low as well as the regional financial dependency ratio is still very high. The degree of fiscal autonomy have significant effect on the capital spending of the local government of Batang Hari Regency, then the ratio of local financial independence and of regional financial dependency have no significant effect on the capital spending of the local government of Batang Hari Regency..

The dynamic effects of aid and taxes on government spending

This paper examines the impact of foreign aid and taxes on government spending for 67 developing countries during 1980–2013 using dynamic heterogeneous (panel) time-series techniques. We find that spending, aid and tax ratios comprise an equilibrium (cointegrated) relation. On average, the aid coefficients (and marginal impacts) are positive but smaller than the tax coefficients, indicating that in the long-run and short-run taxes have a stronger association with expenditures than aid. Central to this heterogeneous relationship is the political calculus between aid and tax—measured according to accountability and bureaucratic costs—whereby recipients offset the political costs of raising taxes against the political costs of receiving more aid. Once measures of political costs are incorporated into the analysis, we find the political costs of aid to be higher than those of tax, reinforcing the primary assertion that for spending, taxes are more important than aid. Countries with higher political costs of aid typically show no aid-spending relationship, while those with lower political costs of aid tend to show an aid-spending relationship. The findings are largely when replicated once we split total spending into capital and consumption spending.

Advantages, disadvantages, and reasons for non-adoption of rotational grazing, herbal leys, trees on farms and ley-arable rotations on English livestock farms

ABSTRACT Adoption of rotational grazing or multi-species herbal leys, planting trees and integrating livestock into arable rotations can increase agricultural productivity and carbon storage on temperate ruminant livestock farms. However, farmers frequently have rational reasons for not adopting seemingly beneficial management practices. Here, we conduct semi-structured interviews with sheep and beef cattle farmers and industry representatives in England, to determine the advantages, disadvantages, and reasons for non-adoption of these four management practices. We find key reasons that farmers rationally do not adopt these practices include capital outlay, incompatibility with farming objectives, and the risk that desired benefits are not delivered.

Regional split and local government spending efficiency in Indonesia

The research objectives are to (1) measure the efficiency of local governments in every province in Indonesia and (2) analyse the impact of regional splitting, GRDP per capita, population density, and fiscal capacity on the efficiency of local governments. This study employed per capita personnel spending, per capita spending on goods and services, and per capita capital spending. The output used in the dataset is the human development index. The first objective (local government efficiency) is measured by Data Envelopment Analysis (DEA), with VRS and an output-oriented model. DMUs are 34 provinces from 2013-to 2018. The second objective (the impact of regional splitting, GRDP per capita, population density, and fiscal capacity on efficiency) is measured by panel data regression with a random effect model. Results show that the always efficient provinces for 2013-2018 were Jakarta, Yogyakarta, and Banten. The study revealed 29 inefficient provinces in 2013, and this number increased to 31 inefficient provinces in 2018. Another finding is that regional splitting, GRDP per capita, population density, and fiscal capacity significantly impact local governments' efficiency. As inefficient provinces need to improve their efficiency, this study recommends that local governments focus on these four independent variables to strengthen their efficiency.

FINANCIAL DEVELOPMENT OF TERRITORIAL COMMUNITIES UNDER MARTIAL LAW

The financial support of territorial communities is proposed to be considered as a process of formation, distribution and use of financial resources in order to satisfy the needs and interests of citizens in the sphere of all life activities in the relevant territory. At the same time, the main form of financial support of territorial communities remains budget financing, the quality of which depends on the level of their economic and social development. The state of financial support for the development of territorial communities under conditions of decentralization in Ukraine was analyzed. It was found that during the studied period the number of UTC grew quite quickly and by the beginning of 2022 was 1469 units. It was well founded that the main source of formation of own and fixed incomes of local budgets is precisely tax revenues. However, in the conditions of the war, the budgets of the communities underwent significant transformations, became more dependent on transfers from the central budget. Communities had to cut capital spending and direct it to defense and the reserve fund. The financial decentralization of local self-government helped the communities to withstand the conditions of large-scale Russian aggression. Keywords: decentralization, financial support, territorial communities, development.