Ukraine budget almost balanced in September

Ukraine’s state budget deficit in 9M13 was UAH 35.2 bln, or almost flat vs. the UAH 34.8 bln deficit for 8M13, according to a MinFin report released on October 31. The targeted 2013 deficit plan is UAH 50.6 bln.

Alexander Paraschiy: A strong increase in September state revenue (+29.4% yoy) was the main reason for the near balanced budget (only a UAH 0.4 bln deficit) through the month. Still, we do not see a positive tendency in this result. In particular, a UAH 5.0 bln wire from the NBU appeared to be the main reason for the impressive state revenue in September (the NBU accounted for UAH 19.7 bln in budget revenue in 9M13). So if the NBU previously purchased state bonds to partially cover the budget deficit, now it’s solving the problem with a direct transfer to the budget. We are keeping our forecast for the year-end budget deficit at 4.0% of GDP.