Regions Warns of Budget Catastrophe.

Nikolai Azarov, a Regions leader who was recently appointed chairman of parliament’s budget committee, attacked the acting government at yesterday’s hearing on the 2007 budget, claiming there was a UAH 30m hole in the state’s accounts that the new government would have to cover. Our Ukraine dismissed the attack as “populism”. According to the acting finance minister, Viktor Pinzenyk, the draft 2007 budget should be revised to account for recent positive trends in the economy. The previous draft assumed 2007 GDP growth of 4.2%, CPI of 9.5% and PPI of 13.4%. Pinzenyk said the budget plan included a deficit of 2% of GDP, the introduction of a single social tax with a cut in overall rates, and modest increases in the minimal wage and other social transfers. Tom Warner: There are problems in the budget, particularly with a shortfall in privatization revenues and arrears related to the gas price increase, but they are not on the scale Azarov is claiming.