REGRESSIVE ANALYSIS AND FORECAST OF STATE DEBT

Sophio Beridze

E-mail: sopho1982@hotmail.com

PhD Student, Batumi Shota Rustaveli State University

Batumi, Georgia

https://orcid.org/0009-0002-7264-2873

Lela Oniani 

E-mail: lela.oniani@bsu.edu.ge

Associate Professor, Batumi Shota Rustaveli State University

Batumi, Georgia

https://orcid.org/0000-0002-5960-4015

Abstract: Actuality of the topic is caused by the role of the debt as financial instrument, as in the sphere of prosperity of the country, as well in its maintenance. State debt plays an important role in the macro-economic system of any Government. Formation of debt, .service and its covering, have a great influence on financial situation of the state, on the movement of money streams, investing climate, establishing international cooperation and its future development between the states. Actuality of the problem of external state debt was increased due to the fact that it is directly connected to the economic safety of the state.

The goal of the article -originating/growth of state debt, despite of its burden is inevitable. If the level of income and employment more or less increase proportionally among with state debt, burden can be bearable and will not need concern. Percentage indicator of debt can not determine the burden of debt. Main determiner of the debt burden is: Annual capacity of debt service, reflection of state debt in economy, face of tax system. The aim of the article is to forecast the scales of factors, which influence on external state debt and implementation of main principles for effective management. In order to achieve goals which are set, there is a model to foresee scales of factors,which influence on state external debt.

Methodology/approach: in order to learn and foresee existing condition of state debt, first of all,there were selected valid factors, which mostly effect on state external debt rather than other factors. Research took place by the building up regressive model, checking its quality and using forecasting models.

Practical value/Implications: the practical significance of the paper is that its statements and conclusions are oriented on solving problems within the optimization of state external debt dynamic. Learning and researching about the influence of state debt on the stability of the state economy, will help conductors of economic policy to plan the right measures to avoid debt crisis. For this purpose:

- We revealed valid factors on the stability of debt according to regressive analysis, among which the most important are the quality of debt service, deficiency of budget and level of employment.

-We have made forecasts about the stability of state external debt and about the factors which influence them till the 2030.