Ukraine budget switches to UAH 3.2 bln surplus in May

Ukraine’s general budget switched to a surplus of UAH
3.2 bln in May from a UAH 1.8 bln deficit in the prior month, the State
Treasury reported on June 25. General budget revenue surged 54.3% yoy to UAH
149.1 bln, accelerating from 8.8% yoy growth in April. General budget
expenditures increased 24.0% yoy to UAH 146.7 bln, accelerating from 16.0% yoy
growth in April.

In 5M21, the general budget deficit amounted to UAH
4.9 bln (vs. a deficit of UAH 32.0 bln in 5M20).

Tax revenue surged 45.4% yoy to UAH 128.9 bln in May,
accelerating from 44.1% yoy growth in April. Net VAT revenue jumped 62.1% yoy
(vs. a 59.6% yoy increase in April), as gross VAT revenue increased 27.1% yoy
and VAT reimbursement increased 7.8% yoy. The growth of revenue from personal
income tax increased 26.6% yoy (vs. 34.2% yoy growth in April). In addition,
royalty payments on the use of natural resources climbed 86.8% yoy (vs. 60.5%
yoy in April).

Non-tax revenue surged 169.7% yoy to UAH 19.0 bln in
May (after declining 37.8% yoy in April). The surge was mostly due to a jump in
revenue from ownership and entrepreneurship, which increased ten times
year-on-year.

Evgeniya Akhtyrko: May’s surge
in budget revenue was partially due to a low comparative base of 2020 (when it
fell 25.3% yoy). The government didn’t rush to accelerate the budget
expenditures, which helped to come up with budget surplus in May.

We see May’s budget surplus as temporary, and we
expect the budget to return to a deficit in the upcoming months.