FISCAL POLICY AS THE BASIS OF COUNTRY STABILITY

ISSN: 3030-3931, Impact factor: 7,241 Volume 10, issue 2, Noyabr 2025 https://worldlyjournals.com/index.php/Yangiizlanuvchi worldly knowledge OAK Index bazalari : research gate, research bib. Qo’shimcha index bazalari: zenodo, open aire. google scholar. Original article 46 FISCAL POLICY AS THE BASIS OF COUNTRY STABILITY Azimjon Meliev Murodullo o‘g‘li, Assistant of Samarkand institute of economics and service Raximova Nigora Muxtorovna, Student of Samarkand institute of economics and service [email protected] Usmonova Yulduzxon Shavkat qizi, Student of Samarkand institute of economics and service yulduz[email protected] Matmurodova Anabibi Davlatmurod qizi, Student of Samarkand institute of economics and service [email protected] Abstract: This article analyzes the role of fiscal policy in ensuring national economic stability. It discusses theoretical foundations, tax policy, public debt management, and international experiences, with a special focus on Uzbekistan’s economic reforms. Keywords: fiscal policy, stability, taxation, budget discipline, public debt, macroeconomic regulation. Annotatsiya. Ushbu maqolada moliyaviy siyosatning mamlakat iqtisodiy barqarorligidagi o‘rni chuqur tahlil qilinadi. Muallif moliyaviy siyosatning nazariy asoslari, soliqqa tortish tizimi, davlat qarzi, byudjet siyosati va xalqaro tajriba misolida O‘zbekiston iqtisodiy islohotlarini yoritadi. Kalit so‘zlar: moliyaviy siyosat, barqarorlik, fiskal intizom, soliq tizimi, davlat qarzi, byudjet siyosati. Аннотация. В статье рассматривается роль финансовой политики в обеспечении экономической стабильности государства. Автор анализирует теоретические основы, налоговую систему, государственный долг и международный опыт на примере Узбекистана. Ключевые слова: финансовая политика, стабильность, бюджетная дисциплина, налоговая система, государственный долг. Introduction The role of financial policy in ensuring the economic stability of the country, its social wellbeing and global competitiveness is incomparable. Financial policy is a set of measures taken by the state to stabilize economic growth by regulating cash flows in the economy, coordinating budget revenues and expenditures, setting taxes, and managing public debt. As ISSN: 3030-3931, Impact factor: 7,241 Volume 10, issue 2, Noyabr 2025 https://worldlyjournals.com/index.php/Yangiizlanuvchi worldly knowledge OAK Index bazalari : research gate, research bib. Qo’shimcha index bazalari: zenodo, open aire. google scholar. Original article 47 economist J. Keynes noted, “the state’s financial policy is the heart of economic life and constitutes the main mechanism for the distribution of national income”. In the case of the Republic of Uzbekistan, financial policy is also considered one of the cornerstones of economic reforms. Fiscal reforms, changes in the taxation system, and optimization of state investment policy being carried out in the country are contributing to increasing the competitiveness of the national economy. Therefore, this article will provide an in-depth analysis of the theoretical foundations of financial policy, its role in the country’s stability, and its analysis based on international experience. Main part Financial policy is a strategic direction that governs the formation, distribution and use of financial resources in the economy by the state. A. Smith, speaking about the role of the state in the economy in his work “The Wealth of Nations”, defined financial policy as “a means of distributing national wealth and stimulating production”. The main tasks of financial policy are: - formation of budget revenues and their rational distribution; - regulation of economic activity through taxes; - management of public debt and reducing their impact on the economy; - ensuring the well-being of the population through financing social programs. For example, in the “New Uzbekistan” development strategy of the Republic of Uzbekistan for 2022–2026, strengthening fiscal stability and budget discipline is defined as a priority direction of state financial policy (Decree of the President of the Republic of Uzbekistan No. PF–60, 2022). Economic stability is the consistency of economic growth rates, low inflation, high employment, and a balanced budget balance in a country. Fiscal policy is the most important tool for ensuring this stability. According to the Keynesian approach, during an economic crisis, the state should stimulate demand by increasing budget expenditures. On the contrary, supporters of monetarism — M. Friedman and A. Schwartz — put forward the idea that “excessive state intervention disrupts economic equilibrium, therefore, fiscal policy, together with monetary policy, should be balanced.” Today, Uzbekistan supports a balanced approach to fiscal policy: it increases economic activity by limiting the state budget deficit, effectively financing investment projects, and simplifying the taxation system. Tax policy is the most basic element of fiscal policy. Through it, state revenues are formed and socio-economic tasks are financed. ISSN: 3030-3931, Impact factor: 7,241 Volume 10, issue 2, Noyabr 2025 https://worldlyjournals.com/index.php/Yangiizlanuvchi worldly knowledge OAK Index bazalari : research gate, research bib. Qo’shimcha index bazalari: zenodo, open aire. google scholar. Original article 48 As Musgrave noted, “tax policy is not only a source of income, but also a means of regulating economic growth.” In Uzbekistan’s experience, in recent years, tax rate reductions and broadening of the tax base have stimulated economic activity. For example, the reduction of the single social security payment rate from 25 percent to 12 percent introduced in 2019 has created favorable conditions for business entities. In addition, the transparency of tax policy and the introduction of electronic systems have increased budget revenues and reduced the risk of corruption. Public debt is a means of temporarily attracting financial resources to maintain balance in the economy. However, if it increases excessively, it poses a threat to economic stability. According to the IMF, when the ratio of public debt to GDP exceeds 60%, macroeconomic stability weakens. Therefore, in Uzbekistan, the ratio of public debt to GDP is set at no more than 40%. Budgetary policy is the mechanism that expresses the state’s fiscal policy in practice. Through it, investment activity in the economy, infrastructure development and social protection issues are regulated. The experience of the USA, Germany and Japan shows that harmonizing fiscal policy in innovative, investment and social directions ensures the economic stability of the country. For example, in Germany, a “flexible fiscal policy” model is in effect, which adjusts budget expenditures depending on the level of economic growth and inflation. Uzbekistan has also strengthened cooperation in this regard with international financial institutions - the World Bank, the International Monetary Fund and the Asian Development Bank. Through this cooperation, the necessary reforms are being implemented for the financial stability of the economy. Conclusion Fiscal policy is the most important economic tool ensuring the stability of the country. Through it, the state regulates the economy, increases social welfare and strengthens its position in global economic competition. In the case of Uzbekistan, areas such as strengthening fiscal discipline, simplifying the tax system, managing public debt, and improving the investment climate are serving to ensure national economic stability. In the future, developing fiscal policy based on the principles of digital governance, green finance, and international fiscal integration will further increase the country's economic resilience. References 1. Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan. 2. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London. ISSN: 3030-3931, Impact factor: 7,241 Volume 10, issue 2, Noyabr 2025 https://worldlyjournals.com/index.php/Yangiizlanuvchi worldly knowledge OAK Index bazalari : research gate, research bib. Qo’shimcha index bazalari: zenodo, open aire. google scholar. Original article 49 3. Musgrave, R. (1959). The Theory of Public Finance. New York: McGraw-Hill. 4. Friedman, M., & Schwartz, A. J. (1963). A Monetary History of the United States, 1867–1960. Princeton University Press. 5. International Monetary Fund (2021). World Economic Outlook Report. Washington, D.C. 6. Bundesministerium der Finanzen (2020). Fiscal Stability and Policy Frameworks in Germany. Berlin. 7. O‘zbekiston Respublikasi Prezidenti (2022). “Yangi O‘zbekiston taraqqiyot strategiyasi” PF–60-son Farmoni. 8. O‘zbekiston Respublikasi Moliya vazirligi (2020). Davlat moliyasini boshqarish samaradorligini oshirish to‘g‘risidagi hisobot.