COORDINATION OF MONETARY AND FISCAL POLICIES OF THE STATE

Abstract

In the article, the author substantiates the position that coordination of monetary and fiscal policies plays a crucial role in achieving and maintaining macroeconomic stabilisation, achieving the set goals of economic development, reaching a sustainable economic growth trajectory, ensuring the balance of foreign economic relations, and maintaining household welfare. The author examines the peculiarities of conducting and implementing monetary and fiscal policy in Ukraine. The author proves that a wide range of problems of coordination of monetary and fiscal policy is the subject of thorough economic analysis and research. The theoretical basis for the intensification of scientific and applied interest is the fact that in recent decades, central banks in almost all countries of the world have been endowed with a wide range of powers and a high level of autonomy. Money supply management by central banks has become the main area of economic regulation. The author concludes that the new economic and political context requires modification of the tasks and functional powers of central banks, as well as the specifics of their interaction with other government institutions. In today's conditions, the independence of a central bank is interpreted as a balanced, rational and harmonious combination of its individual components, such as political, financial, organisational and operational, regulated by law. The implementation of a set of tasks allows the monetary authority to properly perform its functions and be responsible for achieving the objectives of monetary policy. The article proves that dynamic changes in Ukraine's economy require an increase in the efficiency of fiscal and monetary policy instruments and a strengthening of their role in ensuring macroeconomic stabilisation. To strengthen the coordination of fiscal and monetary policy, it is necessary to develop a strategy that takes into account both institutional components and external and internal risks. It is also necessary to improve the soundness of decision-making by fiscal and monetary institutions. The author concludes that the main directions for strengthening the coordination of fiscal and monetary policy in Ukraine include combining the tools inherent in both types of state economic policy, enhancing their flexibility and adaptability to socio-economic processes, synergy of fiscal and monetary policy tools in the context of ensuring debt sustainability and reducing fiscal risks, and substantiation of common strategic goals, which will help to strengthen their coordination. Strengthening the coordination of fiscal and monetary policies in Ukraine is a complex, multidimensional, and rather problematic task that requires significant efforts by both the state institutions that formulate and implement fiscal and monetary policies and the international community. Sound fiscal and monetary policies will contribute to Ukraine's macroeconomic stability and post-war recovery.