Cabinet of Ministers adopts 2009 state budget draft

At an extraordinary sitting on Saturday, the Cabinet of Ministers of Ukraine adopted a draft of the 2009 state budget, with income of UAH 285 bln (USD 58.9 bln) and expenses of UAH 302.4 bln (USD 62.4 mln), which implies a deficit of UAH 17.4 bln (1.4% of GDP). CPI is forecast at 9.5% yoy. Andrii Parkhomenko: We argue that CPI growth of 9.5% is unachievable given the upcoming hike in the price for imported natural gas (+78% yoy by our forecast). Should the Verkhovna Rada approve the budget with CPI of 9.5%, budget income would be inflated and the deficit would be smaller than stated in this budget, 0.8% of GDP, according to our forecast.