Ukraine budget revenue rises 2.1% yoy in October

Ukraine’s state budget revenue in October rose 2.1% yoy from the same year-ago month, compared to a 8.6% yoy decline in the prior month, the State Treasury reported on Nov. 1. For 10M14, budget revenue reached UAH 296 bln, which is 6.2% yoy more than the same year-ago period. The Treasury reimbursed to exporters UAH 4.8 bln of VAT in cash in October, which was 75% more than a year ago (UAH 38.8 bln for 10M14, which is a 14.9% yoy drop). The Treasury placed no new VAT bonds in October.

Alexander Paraschiy: Though state collections increased in October, the minor growth did not change the general picture much. The annual target for state revenue growth is 11.4% yoy, while for 10M14 it was almost twice as slow (+6.2% yoy) and we do not see how it could accelerate over the next two months to compensate for the year’s shortfall.

Against this backdrop, more than UAH 20 bln revenue shortfall looks inevitable in 2014. Still, we do not believe the authorities will dare to break their commitment to the IMF deficit level (UAH 63.8 bln), which means we should anticipate substantial spending cuts already by the end of the year.