Ukraine budget posts UAH 25 bln surplus in January
28 February 2017
Ukraine’s general budget reached a UAH 25.0 bln surplus in January (from UAH 9.0 bln a year ago) owing to a 90.3% yoy surge in revenues, the State Treasury reported on Feb. 27. The central budget posted a UAH 15.8 bln general surplus, while local budgets were UAH 9.3 bln in black. Near-zero VAT reimbursement (UAH 0.03 bln vs. UAH 7.9 bln a year ago) also contributed to the robust result.
Other budget revenues also increased: rent on mineral extraction by 2.5x yoy, personal income tax by 39% yoy, and excise duties by 34% yoy. Only the enterprise profit tax dropped 8.6% yoy. General budget spending also increased substantially (+60.7% yoy), but not as fast as revenues.
Alexander Paraschiy: VAT revenues was responsible for two-thirds of the higher budget collections. VAT revenues increased UAH 23.0 bln through the month with UAH 9.4 bln coming from VAT on internal products, UAH 5.8 bln from VAT on imports and UAH 7.9 bln at the expense of delayed VAT reimbursement.
The strong budget collections fell in line with our expectations. However, we project growth rates to ease in the coming months. VAT for exporters in January has already been reimbursed and no dramatic delays are expected. Still, we anticipate double-digit growth in budget collections to continue.
Against this backdrop, the 2017 budget remains well-balanced and a 3.0% of GDP deficit looks like a realistic target.
