The Impact of Fiscal Regulation on the National Economic Security

Abstract

The national economic security nowadays faces significant challenges, e.g. the increasing debt burden, structural imbalances of the tax system, and the reliance of the budget on external financing sources. Fiscal regulation is a key instrument for shaping financial resilience and macroeconomic stability, which makes a study of its impact on economic security highly relevant. The purpose of the article is to highlight the impact of fiscal regulation on the national economic security based on the analysis of the dynamics of key fiscal indicators, and to outline the main trends shaping the financial stability of the state. Fiscal regulation in the context of economic security is defined as a system of government measures aimed at maintaining financial stability, reducing debt and macroeconomic risks, and creating predictable conditions for the sustainable economic development. A comprehensive analysis of Ukraine's fiscal indicators (tax, budgetary, and debt-related) over 2018-2025 has been carried out from the standpoint of the national economic security. An approach is proposed for assessing the impact of fiscal regulation on the sustainability of public finances in the long term, allowing the identification of key risks and imbalances. An analysis of the fiscal indicators over the period in question showed a significant deterioration in Ukraine's economic security. The primary balance of the state budget became negative, with the debt burden growing at a rapid pace, and expenditures on debt servicing nearly tripled compared to 2018. The share of budget financing from foreign sources exceeded 80-95%, thus increasing the country's external dependence. The structure of tax revenues was shifting toward indirect taxes, increasing the tax burden on households and businesses. At the same time, the subsidization of the Pension Fund of Ukraine was gradually decreasing, indicating some improvements in the social security. The overall assessment shows that the national economic security in Ukraine remains poor and continues to worsen. To enhance the economic security, measures are needed to strengthen the internal revenue base of the budget, optimize expenditures, gradually reduce debt dependence, and develop a more balanced tax system.