Ukraine budget revenue grows 39% yoy in May

Ukraine’s general budget revenue grew 39.3% yoy, slowing from 85.7% yoy growth in the prior month, the State Treasury reported on June 26. The main factor for slowing growth was that in April, one-off revenue from confiscated funds for corruption inflated the month’s results. Otherwise budget revenues keep booming as collections were driven by the enterprise profit tax (up 88.0% yoy), personal income tax (up 38.2% yoy), value-added tax (up 24.7% yoy) and UAH 5 bln in dividends from the central bank. For 5M17, general budget collections rose 46.0% yoy.

Growth of budget spending (23.0% yoy) still lagged behind revenue, translating into further surplus accumulation. In May, the general budget was UAH 11.9 bln in the black, with a UAH 7.0 bln central budget surplus and UAH 4.9 bln local budget surplus. For 5M17, the general budget surplus reached UAH 50.5 bln, or 2.0% of GDP.

Alexander Paraschiy: Budget revenues remain strong and in line with our expectations. The situation is so encouraging that authorities even decided to revise upwards their spending plan. On June 22, parliament passed in the first reading budget amendments that boost central budget revenue and spending projections by UAH 26 bln, or 3.6%. Even with those revisions, the government’s 2017 revenue target (nearly a 20% yoy increase for the general budget) still remains feasible. We remain optimistic about our 3.0% of GDP budget deficit projection for this year.