MinFin finalizing talks with IMF on 2021 budget parameters

Ukraine’s Finance Ministry is currently “at the final
stage of forming a common vision with the IMF on the main budget parameters,”
minister Sergiy Marchenko told Interfax-Ukraine on Nov. 25. He said that the
finalized version of the 2021 budget draft would be soon presented to the
Cabinet. In his statement, Marchenko also “strongly recommended” journalists to
take into account only the official public comments on Ukraine-IMF talks from
the participants of the negotiations, as “other experts do not have enough
information to assess objectively and comment on the situation.”

Recall, Ukraine’s parliament voted on Nov. 5 to approve the first draft
of the state budget for 2021 with a deficit of 6% of GDP. The final draft of
the budget is scheduled to be voted in December. Last year, the parliament
approved in full the state budget for 2020 on Nov. 14, which was
the earliest approval ever in Ukraine.

Alexander Paraschiy: One need
not necessarily be an expert to conclude that MinFin has not yet agreed with
the IMF on the budget parameters for 2021. Most likely, the key IMF concern is
about a high budget deficit without clear sources of its financing. Hopefully,
after the talks with the IMF, MinFin will be able to present to the parliament
a more “consolidated” budget draft. Meanwhile, the key headache for MinFin now
is to seek sources for financing the huge gap in the 2020 budget amid no chance
for IMF support by the end of this year. The only viable opportunity for the
government to somehow fill the gap is a massive (at least USD 3 bln) issue of
new Eurobonds.