Ukraine Treasury residuals surge 2.4x in January
2 February 2017
Ukraine’s Treasury residuals surged 2.4x to UAH 34.9 bln as of Feb. 1 compared to UAH 14.3 bln a month ago, the State Treasury reported on Feb. 1. It was the highest level of residuals since November 2015 (UAH 48.0 bln).
Alexander Paraschiy: Treasury residuals look really impressive. The Ukrainian government didn’t do substantial borrowing last month, which means that the money came from booming tax collections. Only partial data is available but they show a 2.4x jump in VAT collections due to zero VAT reimbursements in January (vs. UAH 7.8 bln VAT reimbursement a year ago).
After ForEx volatility at the year’s start, which was linked to substantial VAT reimbursement to exporters (after which exporters did not sell their foreign currency proceeds), the authorities probably decided to postpone the reimbursement process. Also in January, there should have been stronger collections from personal income taxes after doubled minimum wages.
We are positive about 2017 budget prospects though residuals are very likely to decline over the upcoming months, in line with resumed VAT reimbursement.
