Using Government Securities as a Source of Financing the State Budget Deficit – A Case Study of Uzbekistan

Abstract

This study aims to find out the sources of financing the general budget deficit in the economy of Uzbekistan, and it is noted that the use of state securities, which is considered the most effective method of financing, has a number of positive aspects. In addition, the contribution of each financing source to covering the total budget deficit was studied by calculating the percentage. The study also included an analysis of the budget deficit within the local budget. Along with the historical method, descriptive analytical method was also used in the research. The results of the analysis showed that the Republic of Uzbekistan mainly relied on financing from external sources to cover the state budget deficit. The average contribution of external financing sources to cover the general budget deficit was more than 50 percent in the period under study, and the contribution of domestic financing sources was 20-30 percent in the same period, and this indicator reflected a small percentage compared to financing through external sources. Thus, the research recommends less use of external sources of financing the budget deficit and use of government securities as a source of non-inflationary financing to cover the deficit. The study also recommends rationalizing government spending and improving government revenues to curb the growing budget deficit.