Fathi Shukairi

Nowadays one of the relevant problems of economic development of Ukraine is the excessive increasing of the public debt that has a number of negative consequences for the financial system of the country. The article is devoted to the research of state’s debt sustainability concept. Special attention is paid to the development of an effective system of debt sustainability management. The aim of the article is to study the theoretical bases of the state’s debt sustainability, investigate scientific and methodological approaches to its management, analyze the public debt and debt sustainability of Ukraine. In order to achieve that goal, the following scientific methods were used: analysis and generalization, decomposition analysis, comparison and compilation. The authors analyzed the structure of the debt sustainability management system: objects, subjects, key principles, objectives, methods, instruments, etc. The list of key indicators of debt sustainability was substantiated and the authors compared their normative values in Ukraine and in world practice. Besides, the state and structure of public debt and the ratio of government debt to GDP were scrutinized. The obtained results proved the debt crisis deepening in Ukraine.

The article focuses on the development of scientific and methodological approach to determining the level of creation and use of financial capacity to identify current trends of its transformation and perspective directions for development. The research urgency is due to the need to ensure high level of national security, ineffective use of the existing financial capacity of the state, disputability of scientific approaches to identifying its components and the need to choose the vector for the state’s further development. This requires additional research methodological aspects aimed at obtaining objective and well-founded assessment of the financial capacity level.
The methodological approach proposed involves comparing the actual rated values of creation and use of the authorities’ financial resources (the ratio of the deficit/surplus of the state budget to GDP, the level of GDP redistribution through the consolidated budget, the ratio of the government and government-guaranteed debt to GDP and gross international reserves of Ukraine in the months of imports), financial resources of business entities (the level of listing companies capitalization, the ratio of non-performing loans to total gross loans, credit interest rate, companies’ ROA) and the financial resources of households (the share of cash income in total household resources, the ratio of the average amount of old-age pension to the average monthly nominal wage, the share of spending on food and non-alcoholic beverages in total household spending) with their recommended limits and the establishing a scoring making it possible to form an integral indicator that reflects the level of creation and use of the state’s financial capacity. The methodological approach has been tested using Ukraine as an example. This has made it possible to identify the negative tendencies of the creation and use of Ukraine’s financial capacity (the state budget imbalance, significant debt burden on the budget, high interest rates, significant share of household expenditure on consumption). Based on the results, perspectives for development of the state’s financial capacity are proposed.

According to the current situation in the world economy connected with the coronavirus pandemic, it is difficult to predict GDP growth. Non-economic factors determine the rate of decline in economies of almost all countries. Accordingly, it is extremely difficult to ensure the stable functioning of financial systems. In this situation, the role of public finance, especially the state budget, significantly increases, given the peculiarities of the formation of different levels’ budgets. This research aims to evaluate state budget structural changes on the example of Ukraine. Based on the linear coefficient and the quadratic coefficient of absolute structural changes, the quadratic coefficient of relative structural changes, and integral coefficients of structural changes the authors analyzed the state of public finance in Ukraine since the formation of the state and local budgets and their optimal use to mitigate the effects of the pandemic on the economy can become one of the factors in maintaining financial stability and developing anti-crisis measures. The forecast values of the growth rate of budget revenues and expenditures confirm that the projected revenue gaps are significantly higher than the projected expenditure gaps. The cost structure of the state budget of Ukraine is characterized as a structure with a low level of differences. The Gatev and Ryabtsev coefficients demonstrate unidirectional dynamics. In contrast, Salai coefficient shows the opposite dynamics, which confirms a lack of stability in the cost structure. From 2008 to 2019, the chain rate of change has a significant variation range.

The formation and functioning of the country’s financial system depend on many factors, both endogenous and exogenous. The economic system of a country, as a higher-order system in relation to the financial one, underlies the development of the financial system model. The existing model of the financial system becomes significant in the context of its impact on economic processes in the country. The main purpose of the empirical analysis is to confirm the thesis about the signs of the bank-centricity of the Ukrainian financial market. The share of assets of financial intermediaries in GDP is determined, which indicates a significant decrease in the share of assets of all financial intermediaries in Ukraine. Analysis of the loan-to-deposit ratio in the banking system of Ukraine shows that the deposit base was far smaller than the size of loans throughout the analyzed period. Analysis of non-performing loans by economic sectors shows that the largest share of NPLs is formed in the corporate sector of the economy. Analysis of the structure of banks’ assets, taking into account their owners, shows that at the end of the analyzed period the share of state-owned banks’ assets increased significantly. Thus, having analyzed the functioning of the banking system of Ukraine, one can conclude about the bank-centric nature of Ukraine’s financial system.

General trends of the current stage of development of the world and domestic economies confirm the most important trends of financial systems of the leading countries, including Ukraine. Among them, it is advisable to highlight the following: financial inclusion, formation of an unassailable reputation by financial institutions, reducing the volume of shadow banking, increasing the level of the population’s financial literacy, developing financial technologies, and deepening the financial system. All of this involves increasing the size of financial assets in relation to the size of the economy based on the GDP indicator. Based on the results of generalizing the approaches of scientists to the list of determining factors affecting the development of the country’s financial system, the key role of the level of financial literacy of the population was established. The article presents the total index of financial literacy of the population of individual countries of Europe and the world based on the index components. The development of the financial system in all these areas creates conditions for a gradual transition to the development of a new quality financial ecosystem. The article proposes a definition of the financial ecosystem in the context of established hybrid of real and digital space based on the integration of financial institutions as key players with technology companies, public service providers and other participants. To ensure development, the advantages and disadvantages are specified based on the results of the SWOT analysis, which allowed to systematize the strengths and weaknesses, as well as the opportunities and threats of the financial ecosystem development. Based on the results of the analysis, four basic strategies for restructuring the financial system were developed, which are the basis for proposals for the development of the financial ecosystem and changing the business models of functioning of its subjects in Ukraine.