Ukraine budget revenue slows to 8.9% growth in March

Ukraine’s general budget revenue slowed to 8.9% yoy growth in March from 30.4% yoy in the prior month, the State Treasury reported on April 26. For 3M17, state collections increased 34.9% yoy. The main drivers were rent on mineral extraction (55.5% yoy), personal income tax (32.9% yoy), excise duties (23.9% yoy), and VAT (+23.0% yoy).  Enterprise profit tax collections plunged 65.7% yoy in March. 

Slowing budget revenue resulted into a wider general budget deficit of UAH 14.0 bln in March (UAH 11.1 bln deficit for the central budget and UAH 2.9 bln deficit for local budgets).

The cumulative fiscal balance for three months still remains positive with a UAH 4.0 bln surplus for the general budget. The local budget surplus (UAH 13.7 bln for 1Q17) secured the result while the central budget is in red (UAH 9.7 bln deficit). 

Alexander Paraschiy: Falling collections from the enterprise profit tax were the main reason for slowing budget revenues owing to a revised schedule of profit tax payments. At the same time, all other core sources of budget revenues are maintaining two-digit growth rates.

Against this backdrop, we remain positive about budget revenues meeting the targeted 15.9% yoy general revenue increase in 2017. The deficit will stay within the 3.0% of GDP limit.