Julia Tabenska

The public finance management system is an important lever for equalizing financial and budgetary disproportions in the context of institutional changes. The paper aims to substantiate the directions of development of the public financial management system. Economic and statistical methods and correlation-regression analysis methods are used to determine the relationship between the GDP deflator and the share of revenues, expenditures, the general government budget deficit, and public debt in GDP, assessing the features of the public financial management system in Ukraine and EU countries. This study reveals that one of the main restraining factors in the public finance system development is a significant level of uncertainty in economic processes, which intensifies macroeconomic fluctuations, significant indicators of the share of public debt and budget deficit of the state administration sector pose risks to financial and economic stability; their potential negative impact on socio-economic processes is much more destructive than the pro-cyclical nature of fiscal policy. From this point of view, the public finance management system should be directed at optimizing financial and budgetary tools to prevent the growth of public debt and budget deficit in gross domestic product, which determines the importance of substantiating further development directions of the public financial management system. It is concluded that the mechanism of public financial management in recent years is quite rigid and restrictive, in the context of institutional change expands the tools of public financial management and increases its impact on socio-economic processes.