Ukraine budget deficit breaks 2% GDP ceiling in July

Ukraine’s state budget deficit reached UAH 30.3 bln in 7M13, compared to UAH 14.0 bln a year ago, according to state statistics released on August 29. 

Alexander Paraschiy: The state deficit has exceeded 2% of GDP, with the major part of public spending still ahead. The authorities will try to cover the deficit with quasi-money, enabling the Finance Ministry to pay its liabilities with promissory notes. But the extensive use of a money surrogate may worsen the state’s financial condition. Still, we are still keeping our forecast for the 2013 budget deficit at 3.5% of GDP, assuming a solid part of state liabilities is covered by promissory notes.