IMF board to decide on Ukraine’s next loan tranche on December 20

Ukraine’s Prime Minister Mykola Azarov announced yesterday that the board of the International Monetary Fund is planning to decide on distributing the second USD 1.5 bln loan tranche to Ukraine on December 20, 2010. Mykyta Mykhaylychenko: We see good chances that the tranche will be disbursed at the end of this year (or at the very beginning of the next year, at the latest). Azarov also said that by December 10, the government plans to submit the 2011 state budget to parliament. The budget draft currently implies a fiscal deficit of around 3.1% of GDP in 2011, below the IMF target of 3.5%. We expect the actual budget deficit for 2011 to be somewhat larger, but still see the size of public debt at around 42% of GDP by end-2011F, almost unchanged in relative terms vs. the end-2010F (40%-41%).