Ukraine budget revenue grows 7% in September

Ukraine’s general budget revenues were UAH 60.0 bln in September, or up 6.8% yoy, owing to own revenue of budget organizations (+50.3% yoy), excise duties (+40.9% yoy), and personal income tax (+40.4% yoy), the State Treasury reported on Oct. 27. Remarkably, budget collections were positive without the regular profit wire from the NBU (UAH 8.0 bln a year ago), a decrease in enterprise profit tax collections (-55.6%) (caused by a switch to a quarterly payment schedule) and falling import duties (-53.6% yoy). Revenues slowed from 26.6% yoy growth in August and reached a 12.3% yoy growth in 9M16.

Spending reached UAH 81.1 bln in September, which is 61.1% more than a year ago. Stronger public outlays led immediately to deficit expansion. The general budget deficit was UAH 20.4 bln in September, reaching UAH 31.7 bln for 9M16. This reflected the central budget deficit of UAH 20.5 bln in September and UAH 63.4 bln deficit for 9M16. Local budgets remain in surplus at UAH 31.7 bln for 9M16 (UAH 0.1 bln surplus for September). 

Alexander Paraschiy: Budget revenues are still in good shape. The 12.3% growth in 9M16 is a very good result given the full release of NBU dividends of UAH 38 bln was still delayed. The NBU Council was formed on Oct. 24 and among its first acts was approving the NBU dividends distribution for 2016. By Oct. 27, the NBU wired the first USD 10 bln tranche to the budget.

In light of these developments, we do not expect the government will have problems in meeting the 2016 revenue target, anticipating the budget deficit staying within the 3.7% of GDP limit this year.