Rada Adopts Budget-2006.

On December 20, 2005 the Verkhovna Rada adopted a budget bill for 2006. The budget sets revenues at USD 24.6 bln and expenditures at USD 27 bln, thus implying a deficit of USD 2.4 bln (2.5% of GDP). Concorde Capital: The government managed to squeeze the budget through the Rada, putting an end to three-months of debate. Since its first reading the budget has undergone a number of changes ? it was difficult for politicians to resist increasing spending on social programs, which is always popular before elections. To account for this the government had to enlarge the deficit to 2.5% of GDP from 1.9% as was initially proposed and put off tax reductions. It seems Ukraine will have to put up with another social budget in 2006 that may entail the same macroeconomic risks as this year. Most probably we can expect significant changes to be made to the budget after the Parliamentary elections in March.