1 July 2010
Ukraine’s consolidated budget deficit hit UAH 11.5 bln in 5M10 vs. UAH 1.8 bln in 4M10, the Ministry of Finance reported yesterday. As the government has already started implementing the 2010 budget with increased expenses (+21% yoy in 5M10), only at the end of May did parliament pass appropriate legislation to boost tax revenues (through higher excises, limiting losses carried forward from previous years, etc.). Hence, we expect the gap will not expand that quickly in the coming months and keep our total fiscal deficit forecast for 2010 (incl. Naftogaz) at UAH 68-74 bln, 6.5%-7% of GDP.