System of indicators and criteria for assessing public finance sustainability

Abstract

Introduction. The full-scale war changed the structure of Ukraine's public finances: defense and social needs increased sharply, the domestic revenue base was shocked, and budget balancing became largely dependent on grant and concessional external support. In these conditions, sustainability cannot be interpreted only as formal adherence to pre-war deficit and debt limits, as it determines the state's ability to continuously finance basic functions, maintain liquidity, service obligations, and create fiscal space for recovery Problem Statement. The need to build a system adapted to modern Ukrainian conditions that would simultaneously cover the general government sector (GGS), liquidity and gross financing needs, forecast uncertainty, contingent liabilities, public investment, and institutional quality, and would also change the way indicators are interpreted depending on the war, recovery, or normalized regime. The purpose is to develop a scientifically based architecture of a system of indicators and criteria for assessing the sustainability of Ukraine's public finances, consistent with international standards and adapted to martial law, early recovery and European integration, as well as its testing on forecast parameters for 2027–2029 according to the scenario of the official Forecast of Economic and Social Development of Ukraine for 2027–2029. Methods. Systemic and comparative institutional analysis, content analysis of regulatory and legal acts, grouping and typology of indicators, coefficient analysis, scenario forecast and one-dimensional stress tests were applied. Results. The content of public finance sustainability is revealed as the ability of the state to fulfill obligations, finance priority functions and absorb shocks without the accumulation of unmanageable imbalances. The evolution of regulatory and methodological support in Ukraine is systematized and national approaches are compared with the frameworks of the IMF, EU, Eurostat and the World Bank. Based on scenario 2 of the official macro forecast, a conditional assessment of sustainability for 2027–2029 is carried out. It is found that reducing the deficit does not eliminate high debt, interest rate and currency risks and dependence on concessional external financing. Conclusions. A three-level architecture is proposed: a compact key dashboard, an expanded diagnostic panel and an institutional-quality panel. It combines five thematic blocks, regime-specific interpretation and the dominant-risk principle instead of mechanical averaging. The framework also integrates public-investment readiness, affordability and life-cycle costs and links each signal to a responsible institution and a pre-defined management response. The integration of public investment indicators into medium-term fiscal monitoring and the definition of predefined management responses is justified.