THE STATE BUDGET DURING WARTIME: PRIORITIES, THREATS, AND STABILITY

Abstract

This article presents a comprehensive study of the transformational processes taking place in Ukraine’s state budget under the conditions of the full-scale war that has been ongoing since 2022. The author analyzes profound changes in the structure of budget revenues and expenditures, driven by a sharp shift in fiscal priorities, economic destabilization, a shrinking tax base, and growing external risks. Particular attention is given to the reorientation of fiscal policy from long-term development goals toward ensuring national defense, supporting socially vulnerable groups, and restoring critical infrastructure.

The study identifies the main threats to budgetary stability under martial law, including a high level of fiscal deficit, excessive reliance on international financial support, limited domestic revenue sources, and the need for rapid responses to the dynamically evolving security environment. It also examines international experiences of managing public finances during crises, offering insights relevant to the Ukrainian context.

The article highlights the increasing importance of digitalization in the budgeting process as a tool for transparency, public oversight, and effective financial resource management under conditions of limited time and capacity. It is shown that the implementation of electronic platforms, real-time monitoring, and budget analytics strengthens trust in public institutions and improves coordination with international partners.

A key outcome of the study is the justification for introducing flexible, adaptive budget planning based on scenario modeling, which enables timely resource reallocation in response to environmental changes and helps minimize fiscal risks. The paper also underscores the importance of enhancing the institutional capacity of public finance bodies –particularly the Ministry of Finance of Ukraine in the area of crisis-oriented budget management.

In conclusion, the article proposes a set of practical approaches to strengthening the resilience of the budget system, including expenditure optimization, improved financial discipline, separation of strategic and emergency spending, and more effective mobilization and targeted use of international aid. The findings may be applied to improve Ukraine’s fiscal policy both during wartime and in the post-war recovery phase.