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Rumyana Lilova, Petko Angelov
The Budget Balance – Technical and Financial Aspects
Summary:
The paper focuses on issues related to the procedure for determining the different types of budget balance in compliance with the consolidated fiscal programme (CFP) and the national budget, and their economic interpretation. The paper also specifies that the numeric value which states the difference between the value of receipts and the value of outlays depends on the absolute sum of expenditure on interest payments on internal and external loans. The dynamics of the difference between the values of receipts and outlays under the CFP and under the national budget is analysed. We prove that the rate of change in the consolidated cash budget balance does not match the rate of change in the cash balance on the national budget. We also identify the relation between analysed balance variables and the reference values approved by the Maastricht Treaty and set in the Public Finance Act. An analysis is made of the effect which the rate of change in the nominal value of receipts and outlays exercises on the dynamics of analysed cash budget balances. Finally, we arrive at the conclusion that the value and the relative share of the budget balance in the GDP do not pose a threat to public finance stability.
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Yulian Hristov Voynov
MODEL AND RESULTS OF A STRESS TEST ON PUBLIC FINANCE – ANALYSIS AND COMPARISON WITH THE MODEL OF THE MINISTRY OF FINANCE
Summary:
The article presents a model for calculating the production gap to obtain the cyclically-adjusted budget balance (CAB), which is then used to conduct a stress test with the production gap values to track the reaction of CAB in terms of the Impulse-Response Function in EViews.
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Anna Ivanova
FISCAL CONSOLIDATION: EUROPEAN EXPERIENCE AND THE NEED TO IMPLEMENT IT IN UKRAINE
Summary:
The article focuses on the need to implement fiscal consoli¬dation in countries with high levels of public borrowing. It was found out that the level of public debt of the leading countries around the world far exceeds its allowable rate, which is 60% of GDP.
It was found out that fiscal consolidation is a state policy, which aims to balance public finances at the expense of reducing the budget deficit and accumulated debt. Theoretical models of the impact of fiscal consolidation on aggregate demand and aggregate supply are also studied. The major hazards to the implementation of the policy of fiscal consolidation in highly developed and developing countries are outlined. Attention is drawn to the need to im-plement fiscal consolidation in Ukraine, because the level of public debt in 2015 constituted 79.4% of GDP, significantly exceeding the limits of the al-lowable level. Identified are the main problems related to the functioning of public finance sector in Ukraine. Suggested are ways to stabilize public fi-nances in Ukraine.
