Ukraine budget deficit reaches UAH 251 mln in October

Ukraine’s general budget deficit reached UAH 251 mln
in October, shrinking from a UAH 19.6 bln deficit in September, the State
Treasury reported on Nov. 27. General budget revenue increased 15.2% yoy to UAH
95.7 bln, slowing from 18.7% yoy growth in September. Budget expenditures rose
2.8% yoy to UAH 95.9 bln, slowing from 6.0% yoy growth in September.

Tax revenue improved 22.5% yoy, speeding up from 17.9%
yoy growth in September. In particular, rent payments for the use of natural
resources surged 126% yoy after 8.8% yoy decline in September. In addition, net
VAT receipts grew 22% yoy (vs. 22% yoy decline in September) amid slowed VAT
reimbursement (5% yoy growth in October vs. 29% yoy growth in September).
Personal tax income advanced 24% yoy. Meanwhile, receipts from enterprise
profit tax inched up 0.6% yoy (after a 116% yoy surge in September).

Non-tax revenue dropped 28.4% yoy, after 23.7% yoy
growth in the previous month. In particular, income from ownership and
entrepreneurship plummeted 82% yoy after a 179% yoy surge in September.

In 10M18, the general budget posted a surplus of UAH
15.3 bln amid revenue growth of 15.6% yoy and an expenditure surge of 18.2%
yoy. General budget revenue met 80% of the 2018 plan in 10M18, while
expenditures were at 72%.

Evgeniya Akhtyrko: The budget
deficit growth is uneven. Currently, only personal income tax demonstrates a
stable yoy increase. The receipts from the enterprise profit tax are bumpy,
which points to the practice of “manual collection” likely being employed.

The negative budget balance in October is not a
surprise as a deficit (at 2.5% of GDP) had been planned. We expect the budget
to stay in deficit through the year end, amid a traditional year-end surge in
budget spending and 2018 budget parameters being close to those planned.