Ukraine budget deficit reaches UAH 16.1 bln in April
3 June 2013
For the first four months of 2013, Ukraine’s state budget deficit reached a record-high UAH 16.1 bln vs. UAH 4.5 bln a year ago, according a MinFin report released on May 31. State budget revenue increased 4.9% yoy, while spending surged 16.2% yoy.
Alexander Paraschiy: The Ukrainian government keeps spending much faster than collecting. Already in April, the state deficit reached 32% of the full-year target (UAH 50.5 bln). Such a fast deficit increase never happened: the authorities usually delay with spending till the second half to have a better picture of what is affordable in the spending plan. This time, the situation is different with social outlays (+42.2% yoy) taking the lead of spending growth.
We still are not inclined to overdramatize this tendency since the NBU is ready to provide infinite support to the budget. But it is very likely that the 2013 budget deficit will exceed the 3.1% GDP target, specified in the budget law. In this respect, we update our budget deficit estimate to 3.5% GDP (from 3.0%) for the current year.
