Ukraine parliament approves 2019 state budget in first reading

Ukraine’s parliament voted on Oct. 18 to approve the
first reading of the 2020 state budget, the Interfax Ukraine news agency
reported. The major budget parameters didn’t change from what the Cabinet of Ministers submitted in September.

The parliamentary budget committee completely or
partially took into account 772 out of 1,404 amendments submitted by MPs, its
deputy head Oleksandr Trukhin said afterwards. Prime Minister Oleksiy Honcharuk
said the next budget draft should be submitted for a second reading on Nov. 2
and will be based on the updated macroeconomic forecast, which “is being finalized.”

Evgeniya Akhtyrko: We expect
the draft submitted for the second reading to be based on quite a conservative
forecast of economic growth in 2020, despite the ambitious plans declared by the Cabinet for the next five
years. It has yet to explain the ways and means by which
such significant growth could be achieved even in the mid-term.

Instead, a conservative macroeconomic forecast will be
more realistic and therefore more “sellable” to the IMF, which is currently in talks with Ukraine for a new loan deal.
On the downside, this will be the first hard evidence that the Zelensky
administration is failing to fulfill its promises of a fast improvement in
living standards in the country.