Ukraine state budget reaches UAH 3.6 bln surplus in 1Q15

The state budget reached a UAH 3.6 bln surplus in 1Q15, First Deputy Minister of Finance Igor Umanskiy reported on April 16. “In 1Q15 for the first time over the last few years we have reached a surplus of about UAH 3.6 bln. State budget revenues have increased 37%”, Umanskiy noted.

Alexander Paraschiy: Apparently, hryvnia devaluation and the subsequent inflation jump was the main reason for the upsurge in state collections. However, before a detailed budget report is released we cannot draw any conclusions from the words of Umanskiy.  Firstly, in the beginning of 2015 a solid part of local budget revenues was moved to the central budget what boosted central budget collections artificially. Secondly, for 2015 the Minfin has envisaged an almost 3x increase of revenues from the NBU (UAH 60.5 bln vs. UAH 22.8 bln) and very likely a large part of this impressive growth was due to this support. Finally, we cannot rule out modest spending in 1Q15 which could also be reflected in the state budget surplus report for 1Q15. To put it another way, it is too early to celebrate improvements in the fiscal situation before we know all details.