Ukraine budget deficit amounts to UAH 6 bln in November

Ukraine’s general budget deficit shrank to UAH 6.4 bln
in November from UAH 8.4 bln in the prior month, the State Treasury reported on
Dec. 24. General budget revenue surged 33% yoy to UAH 175.8 bln after increasing
22% yoy in October. General budget expenditures climbed 33% yoy to UAH 182.1
bln, after increasing 1% yoy in November.

In 11M21, the general budget deficit amounted to UAH
12.2 bln (vs. a deficit of UAH 94.7 bln in 11M20).

Tax revenue jumped 37% yoy to UAH 161.1 bln in
November, accelerating from 21% yoy growth in November. In particular,
enterprise profit tax surged 83% yoy, royalty payments on the use of natural
resources increased 56% yoy, and VAT on imported goods jumped 44%. Revenue from
personal income tax increased 19% yoy.

At the same time, net VAT increased 2% yoy (vs. 27%
yoy in October), as VAT increased 22% yoy, while VAT reimbursement surged 41%
yoy. Revenue from excise taxes on domestic goods plummeted 65% yoy (vs. 10% yoy
growth in October).

Non-tax revenue inched up 0.3% yoy to UAH 14.2 bln in
November (after surging 37% yoy in October). In particular, the revenue of
budget-financed entities declined 17% yoy (vs. 56% yoy growth in October) . At
the same time, revenue from ownership and entrepreneurial activity jumped 40%
yoy and administrative payments surged 88% yoy.

Evgeniya Akhtyrko:  Budget expenditures picked up significantly in November.
However, due to a surge in budget revenue, the budget deficit remained quite
moderate. We expect the budget deficit in 2021 will be much smaller than
planned (recall, the 2021 state budget deficit is planned at UAH 246 bln, or 5.5% of GDP) due to faster-than-expected
growth of budget revenue. The overperformance in budget revenue is the result
of higher inflation as well as increased efforts by government bodies in
revenue collection.