Ukraine general budget revenue rises 31% in August

Ukraine’s general
budget revenue rose 31.4% yoy in August, slowing from 43.4% yoy growth in the
prior month, according to a State Treasury report on Sept. 27. The growth was
driven by a 92.1% yoy surge in rent on mineral extraction, 48.4% yoy growth in
enterprise profit tax, 32.9% yoy increase in personal income tax, 20.0% yoy VAT
growth and UAH 5.0 bln dividends from the NBU. For 8M17, general budget revenue
grew 43.4% yoy.

Revenue still
exceeded spending as the general budget was reported in August with a UAH 15.8
bln surplus, which includes a UAH 11.5 bln surplus of the central budget and
UAH 4.4 bln surplus of local budgets. For 8M17, the general budget had a UAH
68.6 bln surplus (UAH 38.5 bln at the central level and UAH 30.2 bln at the
local level).

Alexander
Paraschiy: State collections
are in good shape. Growth rates are slowing, as we expected, however they are
still higher than the government’s targeted 25.5% revenue growth for 2017. We
expect state revenue to keep easing in the coming months due to a high
comparative base. A year ago, an NBU dividends wire (UAH 38.2 bln) peaked at
the end of the year (4Q16).

This year, we will
see a drop in these revenues in 4Q17 since the main part of the accrued
dividends (UAH 30 bln out of UAH 45 bln) has been already transferred to the
budget. Despite the anticipated slowdown, we see strong chances to meet the
targeted revenue level and for the deficit to be below the 3.0% of GDP standard.