Ukraine budget deficit shrinks to UAH 3 bln in March

Ukraine’s general budget deficit shrank to a UAH 3.0
bln deficit in March from UAH 10.0 bln in the prior month, the State Treasury
reported on April 27. General budget revenue jumped 24.0% yoy to UAH 138.3 bln,
rising from 8.0% yoy in February. General budget expenditures increased 10.6%
yoy to UAH 116.4 bln, slowing from 19.1% yoy growth in February.

In 1Q21, the general budget deficit amounted to UAH
6.3 bln (vs. a deficit of UAH 17.3 bln in 1Q20).

Tax revenue surged 23.0% yoy to UAH 124.8 bln in
March, accelerating from 9.1% yoy growth in February. Net VAT revenue jumped
59.3% yoy (vs. a 12.7% yoy decline in February), as gross VAT revenue jumped
33.3% yoy and VAT reimbursement increased 13.5% yoy. Enterprise profit tax
advanced 5.7% yoy (after decreasing 25.0% yoy in February). VAT revenue from
imported goods increased 39.7% yoy (vs. 19.9% yoy growth in February). The
growth of revenue from personal income tax accelerated to 9.1% yoy (from 7.7%
yoy growth in February).

Non-tax revenue jumped 36.3% yoy to UAH 8.2 bln in
March (after sliding 1.0% yoy in February). In particular, the revenues of
budget-financed entities surged 51.1% yoy, and administrative payments
increased 9.7% yoy. Income from ownership and entrepreneurial activities
advanced 3.5% yoy.

Evgeniya Akhtyrko: The budget
revenue advanced significantly in March amid a surge in net VAT collections.
The growth of budget expenditures slowed down amid the rising difficulties with
budget deficit financing. As a result, the budget deficit shrank in March.

We don’t expect the budget deficit to enlarge
significantly in April. It’s most likely that public expenditures have been
curbed, as the situation with raising more debt for budget gap financing was
difficult for most of the month.