Ukraine Cabinet approves 2017 draft budget

Ukraine’s Cabinet of Ministers approved on Sept. 15 the 2017 draft budget, Prime Minister Volodymyr Groysman said during its presentation. General budget revenue was approved at UAH 876.9 bln, which is 17% higher than the 2016 target. The general budget deficit was approved at 3% of GDP of UAH 77.5 bln. The spending plan is based on a 3% yoy real GDP growth forecast, 8.1% yoy CPI increase and UAH 27.2/USD average exchange rate. Nominal GDP is projected at the level of UAH 2,584.9 bln (+14.2% compared to a plan for 2016).

Alexander Paraschiy: The 2017 draft budget should be submitted to parliament the same day, according to budget rules. We know little about this spending plan except for the fact that special tax exemptions for agri-producers will be eliminated and excise duties will rise further. Also, the Finance Ministry mentioned a substantial increase in salaries for hospital staff and school teachers. 

More details of the spending plan should be revealed soon. We don’t anticipate anything outstanding since a lot of problems, including those quasi-fiscal such as Naftogaz’s deficit, have been resolved. We project a much easier approval of the 2017 budget compared to the tense conflicts of the last two years.