MinFin reports it agreed on 2021 budget parameters with IMF

Ukraine’s Finance
Ministry reported in the morning of Nov. 26 that that it “has successfully
completed” talks with the IMF on the basic parameters of the draft state budget
for 2021. The ministry claims this was one of the key prerequisites of the
first review of the IMF-sponsored Stand-by program, the determination of a date
for the IMF’s visit and the next tranche under the program.

However, the
Ministry disclosed no parameters of the state budget that have been agreed upon
with the fund. Recall, the first draft of the 2021 budget was approved by the parliament on
Nov. 5. It
assumed a budget deficit of UAH 260 bln (6% of GDP) and budget revenue growth
by 10% yoy in the next year.

Alexander
Paraschiy: Hopefully
this will allow MinFin to concentrate its efforts on seeking sources to finance
the deficit of this year, including preparations to issue new Eurobonds.
Although the news looks encouraging, this is just the start of the budgeting
process as the updated budget draft should gain approval by the Cabinet and
parliament, which might be challenging. In any case, it is too early to claim
that Ukraine has resolved all the outstanding issues with the IMF, which leaves
little chance for
getting IMF money in the next two months.