Budget shortfall close to reaching 5.3% of GDP in 2012

State budget revenue grew 7.5% yoy in 11M12, according to preliminary data released by the State Treasury on Dec. 4.

Alexander Paraschiy: The budget’s revenue plan assumes a 23.0% yoy state collection increase in 2012, yet we see a 3x smaller rate a month short of the full-year. From this angle, there’s no doubt the shortfall will be at least UAH 75 bln, or 5.3% of GDP. The gap will be covered from external loans (net USD 3.35 bln Eurobonds in 2012), internal loans (UAH 28.6 bln net as of end-November) and privatization proceeds (UAH 5.7 bln in 10M12). The cabinet therefore has enough funds to cover liabilities this year. Next year looks more risky but still manageable assuming the final budget 2013 is prudent enough (no more than a 3% GDP deficit).