Parliament raises state budget revenue/expenditure plan

Ukrainian parliament passed into the law the bill that approves USD 4.2 bln (2.2% of 2012 GDP) increase in both state budget revenues and expenditures. The draft law which aims at delivering the president’s new social initiatives (apparently related to the upcoming parliamentary election in October) was submitted to the parliament on Tuesday and approved swiftly with no changes and little discussion yesterday. The new law leaves the budget deficit unchanged at 1.7% of GDP. As we noted previously the higher revenue target, which we think is hardly achievable, implies more administrative pressure on business and higher risks of government missing the target deficit ceiling. See our news from Apr. 11 for more details.