Ukraine budget balance switches to UAH 19.6 bln deficit in September

Ukraine’s general budget balance switched to a deficit
of UAH 19.6 bln in September from a UAH 26.9 bln surplus in August, the State
Treasury reported on Oct. 26. General budget revenue increased 18.7% yoy to UAH
87.8 bln (25.1% less m/m). Budget expenditures rose 6.0% yoy to UAH 107.4 bln,
slowing from 7.1% yoy growth in August.

Tax revenue improved 17.9% yoy, keeping almost the
same growth rate as in August. In particular, the enterprise profit tax surged
116% yoy, accelerating from 31% yoy growth in August.  Meanwhile, net VAT
receipts dropped 22% yoy (vs. 23% yoy growth in August) amid decelerated growth
of VAT receipts (9.7% yoy growth in September vs. 21% yoy growth in August) and
boosted VAT reimbursement (29% yoy growth in September vs. 9.3% yoy growth in
August). Personal tax income advanced 20.1% yoy.

Non-tax revenue advanced 23.7% yoy, accelerating from
10.3% growth yoy in the previous month. In particular, income from ownership
and entrepreneurship surged 179% yoy.

In 9M18, the general budget posted a surplus of UAH
15.5 bln amid revenue growth of 15.6% yoy and an expenditure surge of 20.3%
yoy. General budget revenue has already met 72% of the 2018 plan in 9M18, while
expenditures are at 65%.

Evgeniya Akhtyrko: A seasonal month-to-month drop in September budget revenue resulted in
the general budget deficit. We expect the budget to stay in deficit through the
end of the year, amid a traditional year-end surge in budget spending. At the
moment, we expect the 2018 budget parameters to be close to those planned
(state budget deficit not exceeding 2.5% of GDP).