Ukraine budget balance switches to surplus in November

Ukraine’s general budget switched to a surplus of UAH
7.1 bln in November from a UAH 251 mln deficit in October, the State Treasury
reported on Dec. 26. General budget revenue increased 21.6% yoy to UAH 122 bln,
accelerating from 15.2% yoy growth in October. Budget expenditures rose 16.7%
yoy to UAH 115 bln, speeding up from 2.8% yoy growth in October.

Tax revenue increased 21.8% yoy, slowing slightly from
22.5% yoy growth in October. In particular, rent payments for the use of
natural resources maintained a high growth pace, surging 103% yoy. In addition,
enterprise profit tax growth rose to 32.4% yoy from 0.6% yoy in October.

Meanwhile, net VAT receipts declined 16.6% yoy (vs. 18.1%
yoy growth in October) amid fast-growing VAT reimbursement (19.5% yoy growth in
November vs. 6.3% yoy growth in October). The revenue from personal income tax
advanced 26.2% yoy.

Non-tax revenue increased 21.6% yoy, after a 28.4% yoy
decline in October. In particular, income from ownership and entrepreneurship
surged 33.8% yoy after a 82.0% yoy drop in October.

In 11M18, the general budget posted a surplus of UAH
22.4 bln amid revenue growth of 16.3% yoy and an expenditure surge of 18.1%
yoy. General budget revenue met 91% of the 2018 plan in 11M18, while
expenditures were at 80%.

Evgeniya Akhtyrko: The general
budget surplus, both in November and in 11M18, is the result of cautious
spending throughout most of the year. We expect a significant surge of budget
spending in December, which is the usual practice in Ukrainian public finance
management. The expected December spending is not likely to distort planned
budget parameters, as the 2018 state budget assumes a 2.5% of GDP deficit.