Fiscal deficit declines by 9.4x y-o-y in 8M11

Ukraine’s fiscal deficit amounted to UAH 4.7 bln in 8M11, a decline of 9.4x y-o-y, according to a Finance Ministry official quoted by Interfax yesterday. Svetlana Rekrut: Budget income performance so far in 2011 is being driven by a considerable improvement in tax collection (+44.9% y-o-y in 7M11) thanks to solid economic growth (+5.3% y-o-y in 1Q11; +3.8% y-o-y in 2Q11) and implementation of the new tax code, which took effect on January 1, 2011. High privatization proceeds (UAH 10.5 bln alone from the March sale of Ukrtelecom) in 1H11 also played a role. We see the 2011 fiscal deficit staying at ~3.5% of GDP.