Ukraine budget revenue slumps 19% yoy in August

Ukraine’s state budget revenue slumped 18.7% yoy in August (-1.4% yoy in 8M13), the state Treasury reported on September 2.

Alexander Paraschiy: As we expected, budget revenue returned to a declining trend in August. A slowing private consumption and deflationary trend will make it difficult to meet the state revenue target for 2013. State collections should increase 6.9% y/y in 2013 (UAH +24 bln), according to the amended budget plan. Instead, they fell 1.4% in 8M13, or UAH 3.1 bln less than a year ago. Against this backdrop, our forecast of a fiscal gap near UAH 75 bln, or 5% of GDP (net of Naftogaz Ukrainy), becomes even optimistic. In light of this, we have to revise our cash deficit estimate up to 4% of GDP, with the rest of liabilities covered by promissory notes.