INVESTMENT ENTITIES ON THE GOVERNMENT DEBT MARKET

Abstract

The political, economic and social instability prevailing in Ukraine makes it necessary for the state to find various sources of funding for growing needs. The war in Ukraine and previously accumulated problems complicate the task. The article substantiates the need to activate investment entities on the public debt market in connection with the growing budget deficit. The presence of debt problems in Ukraine is clearly visible from the analyzed statistical indicators characterizing the debt burden on the State Budget of Ukraine. In particular, this is the amount of public debt (external debt, domestic debt, state-guaranteed debt), as well as the ratio of public debt to the country's GDP. The characteristics of the main subjects of investment in the public debt market, which are generally represented by institutional investors, private investors, foreign investors and central banks, are given. In the domestic market, the shares in the ownership of government bonds of individual subjects were analyzed, in particular: the NBU, legal entities, banks, individuals, non-residents and territorial communities. Emphasis is placed on the analysis of banks' investment activities in government debt instruments, given their determining role as investors in the government debt market of Ukraine. The growing investment interest of the banking sector, which is directed from the sphere of lending to the real economy to the sphere of public debt investment, is described. The participation of foreign investors in financing the budget deficit is described, among the instruments of such financing are bonds and direct loans of international financial institutions and governments of foreign countries. The key features characterizing the activity of investment entities on the public debt market in Ukraine are highlighted. A conclusion was made about the need to solve urgent problems in the market of the public debt of Ukraine and their direct dependence on the general macroeconomic and political situation of the country. In Ukraine, investment entities under martial law continue to finance the deficit of the state budget, providing the sum of the government's expenses for financing military expenses and other priority needs. Prospects for further research are launched by assessing the consequences of debt financing of the budget.