Ukraine budget revenue grows 33% yoy in January

Ukraine’s general budget revenue grew 32.7% yoy to UAH 38.1 bln in January compared to 43.0% yoy in December, the State Treasury reported on Feb. 26. The main sources of growth were excise duties (+65% yoy), VAT collections (+52% yoy) and personal income tax (+37% yoy), while enterprise profit tax revenue fell 76% yoy.

January budget spending fell 7.1% yoy (to UAH 29.1 bln), compared to rising 29.9% yoy in December. Interestingly, VAT reimbursement for exporters surged 64% yoy.

Ukraine’s central budget revenue increased 32.6% yoy in January to UAH 29.6 bln. Its spending fell 13.9% yoy to UAH 27.3 bln.

The general budget enjoyed a UAH 9.0 bln surplus at the end of January, consisting of a UAH 6.57 bln surplus among local budgets and UAH 2.45 bln in the central budget.

Alexander Paraschiy: General budget collections growth of more than 30% is a very good start to the year. The general budget revenue plan assumed 5.1% yoy growth in full year 2016, according to the State Treasury report. Given that in January there was no central bank support and the result was achieved exclusively on regular collections, we see a high chance for the safe implementation of the 2016 budget revenue target. Those collections exceeding Finance Ministry plans will serve as a good cushion to cover extra costs related to debt servicing should the hryvnia decline again. Recall that spending plan was based on a UAH 24.1/USD exchange rate while the hryvnia has already broken past UAH 27/USD. Previously, we estimated that under the average hryvnia exchange rate of UAH 27/USD, an extra UAH 6 bln in outlays will be needed on interest payments in 2016.