Ukraine budget deficit shrinks to UAH 1.8 bln in April

Ukraine’s general budget deficit shrank to UAH 1.8 bln
in April from UAH 3.0 bln in the prior month, the State Treasury reported on
May 25. General budget revenue increased 8.8% yoy to UAH 134.0 bln, slowing
from 24.0% yoy growth in March. General budget expenditures inched up 1.9% yoy
to UAH 135.3 bln, slowing from 24.0 yoy growth in March.

In 4M21, the general budget deficit amounted to UAH
8.1 bln (vs. a deficit of UAH 10.7 bln in 4M20).

Tax revenue surged 44.1% yoy to UAH 100.7 bln in
April, accelerating from 23.0% yoy growth in March. Net VAT revenue jumped
59.6% yoy (vs. a 59.3% yoy increase in March), as gross VAT revenue jumped
25.4% yoy and VAT reimbursement increased 3.6% yoy. The growth of revenue from
personal income tax accelerated to 34.2% yoy (from 9.1% yoy growth in March).
In addition, royalty payments on the use of natural resources increased 60.5%
yoy (vs. 11.3% yoy in March).

Non-tax revenue plummeted 37.8% yoy to UAH 32.9 bln in
April (after surging 23.0% yoy in March). The decline was mostly due to a 42.9%
yoy drop in the dividends paid to the budget by the National Bank of Ukraine.

Evgeniya Akhtyrko: April’s
jump in tax revenue was partially due to a low comparative base of April 2020
(when it fell 13.7% yoy). The growth of budget expenditures in April was quite
moderate which resulted in relatively low budget revenue.

We might see a higher budget deficit in upcoming
months as the recent borrowing of USD 1.25 bln via the placement of 8Y international Eurobonds
provided the additional resources for financing the budget deficit.