SOCIALLY ORIENTED FISCAL POLICY IN TIMES OF WAR: THREATS, LIMITATIONS AND ADAPTATION MECHANISMS

Abstract

The article considers the current issues of transforming the socially oriented fiscal policy of Ukraine in the conditions of a full-scale war. It is emphasized that the fiscal system has been significantly burdened due to the increase in defense spending, humanitarian response and elimination of the consequences of the destruction of critical infrastructure. At the same time, the social function of the state remains decisive in maintaining social stability, cohesion and the ability to economic recovery. In such conditions, there is an objective need to adapt fiscal policy to the realities of wartime without losing its social orientation. The paper analyzes the key fiscal constraints on the implementation of social policy: a reduction in the budget revenue base, a significant deficit in public finances, restrictions on financing social programs, uneven access to services, and increased external financial dependence. Critical risks are identified: deepening poverty, a decrease in the quality of life of the population, increased social tension, and depopulation trends. The need to reorient fiscal policy to protect the most vulnerable categories of the population is indicated, especially internally displaced persons, large families, people with disabilities and residents of frontline regions. The article substantiates the system of adaptation mechanisms of socially oriented fiscal policy in martial law conditions. Key tools include the digitalization of social payments, expanding the targeting of assistance, introducing a single digital platform for registering needs, flexible budget planning with reserve funds, and including international assistance in the public finance system. Particular attention is paid to reforming the system of benefits, developing public-private partnerships in the field of social infrastructure, and supporting households through tax instruments. It is emphasized that an effective socially oriented fiscal policy in war conditions should be based on the principles of inclusiveness, transparency, flexibility, and result orientation. It should perform not only compensatory, but also stabilizing and restorative functions. Successful adaptation of such a policy will help preserve the social potential of the nation, strengthen the legitimacy of the state, and create the basis for long-term socio-economic growth in the post-war period.